How does the bitcoin source code define its 21 million cap?
Many of bitcoin’s staunchest critics have expressed doubt about its 21 million cap, but perhaps the most mindless criticism relates…,
Large exchanges and financial services providers such as Unchained Capital rely on industry best practices such as 100% cold-storage, multisig, and multi-factor identity verification. Unfortunately, it’s been challenging for individuals and smaller businesses to achieve this same level of security and reliability for themselves.
That changes today. We are excited to announce the release of our new vault product. Unchained vaults make these best practices accessible to individuals, small funds & businesses through our easy to use website. All you need to get started is a hardware wallet (or two!).
Unchained vaults use dedicated, on-chain bitcoin multisig addresses. You get to control who holds keys to these addresses, allowing you to define the security that’s best for you. Our website makes it easy to upload your public keys, build new vault addresses, and coordinate transaction signing. Unchained Capital can cosign with you if requested or if you lose one of your keys, but you remain in control. We call this model collaborative custody.
Unchained Capital is the first company to offer these kinds of extremely high-security vaults within a financial services platform. And our vaults integrate seamlessly with our existing loans: once you have funded a vault, if you need to borrow against your bitcoin (or use a future product from us), you can do so easily and quickly from within our application. You can even continue to use the same key(s).
Read more below and try our new vaults out for yourself on our website: https://my.unchained.com/orgs/new.
Based on public reported compromises, exchanges lost nearly $900 million worth of cryptocurrency in 2018 alone.
Bitcoin custodial services, including exchanges, create a myriad of risks that users can control if they protect their own private keys. Self-custody of keys mitigates risks from these common sources:
With all of these issues, users are wise to turn to self-custody solutions such as hardware wallets. But this presents its own set of challenges.
Millions of cryptocurrency holders have graduated from buying their first coins on an exchange to now securing them with a Trezor or Ledger. This increases the transparency and control they have over their funds and eliminates many of the risks of using exchanges or centralized custodians.
But a single hardware wallet is a single point of failure. Even if you keep wallet words as a backup, there are many situations where losing or compromising your hardware wallet means losing your funds. Most worryingly, attackers who know you self-custody don’t need to hack a sophisticated exchange; they just need to hack you or threaten the safety of you or your loved ones. Very few people are capable of securing large amounts of physical gold by themselves — why should millions of people attempt to secure digital gold on their own?
The solution to this problem is to use multisig storage. Multisig prevents any one key from being a single point of failure should it be lost or compromised. Unfortunately, multisig has been out of reach of most individuals and businesses, even those with significant amounts of cryptocurrency.
Though many wallets exist that provide multisig, most provide only software without the crucial operational aspects of multisig such as cosigning, sharing keys and vaults among users, identity and intent verification, or key recovery.
Unchained Capital started as a financial services company that needed the best possible multisig software AND operations to secure our borrowers’ collateral. The experience of building a world-class multisig, multi-tenant storage platform for our own internal use helped us understand what individuals need from multisig custody.
Multisig is a middle path between losing control of your funds on an exchange and creating a single point of a failure by through self-custody with a single key:
The benefits presented above are generic to any multisig wallet software. As an experienced financial services provider, Unchained goes much further to ensure the best security for your funds:
One of the greatest benefits of self-custody is the high privacy it confers. You are directly interacting with the blockchain without any intermediaries. No one knows who you are or how much bitcoin you possess.
Increasing your security by adopting multisig is valuable, but it does incur an anonymity cost. Because we want you to improve your security, we have worked very hard to ensure that this anonymity cost is minimized:
m/44'/...BIP32 namespace to organize your addresses and balances. When you use such a hardware wallet on our platform, we export public keys from the
m/45'/...namespace. This means that we have no idea what your self-custody addresses or balances are outside our platform. You can even customize this BIP32 path when you upload your public key, giving you even greater ability to control how much information we have about your holdings. You are welcome to use hardware wallets for both single signature self-custody and an Unchained Vault.
Our vaults are 2-of-3 multisig addresses. This means 2 keys are required to move funds and 1 key serves as a backup. We believe this 2-of-3 model is the best compromise between security, redundancy, and complexity.
Within this structure, you have a lot of freedom to customize who holds keys, allowing you to build a security model that is right for your use case.
We offer two different custody models for our vaults:
Our client-controlled model is designed to be self-service: most of the time you will be signing and cosigning by yourself or with other Unchained Capital users. There is no setup fee or ongoing storage fee. We will only charge you 0.10% of the transaction amount when you ask us to cosign. Furthermore, for the first three months, we are in our “limited release” phase, asking for feedback from you, our users. All transactions will be 100% free during this time.
Our multi-institution model requires more coordination between more parties and so we charge a $500 setup fee, a 0.25% annual storage fee (accrued daily), as well as a 0.10% transaction fee.
Once you have created an account and your basic contact information has been approved, you will be able to upload public keys from your hardware wallets and create your own multisig vault.
Reach out to us at firstname.lastname@example.org if you have any questions or feedback!
Many of bitcoin’s staunchest critics have expressed doubt about its 21 million cap, but perhaps the most mindless criticism relates…Ted Stevenot, Stephen Hall
When Satoshi Nakamoto created bitcoin, he established in its code a fixed number of bitcoin that will ever exist. Since…Ted Stevenot
Originally published in Parker’s dedicated Gradually, Then Suddenly publication. Bitcoin is often described as a hedge, or more specifically, a…Parker Lewis