Who put the Crypto in the Cookie Jar?
Balance is the safest way to custody, trade, and manage digital assets.
In the early days of cryptocurrency, storing your digital assets in a wallet file on your computer was a novelty and was part of the attraction of this burgeoning economic system. With some basic technical knowledge, you could mine or mint, store, and transact your digital currencies from your desktop, and eventually your mobile device.
As the technology became widely adopted and the value of these assets meaningful, we found ourselves looking for safe solutions to store our assets that didn’t have a steep learning curve. The world of cryptocurrency had now opened to everyone, and legitimate financial institutions are taking notice.
As with traditional banking and custodianship of assets, people became aware of the risks of storing their money, stock and bond certificates and other valuables on their own.
They could get robbed, they could lose their keys, or could forget which cookie jar they put their “rainy day” fund in. Traditional custodian banking emerged into existence due to a need to store and safeguard the record of ownership of stock and bond certificates. Imagine if all your wealth was tied to a pile of paper and one of those nefarious fires of the 1800s burned down your house or place of business.
Your family or your company’s wealth would be wiped out in a puff of smoke. Besides that, having reputable third-party custodians was essential to the development of the mutual fund markets of today.
With infamous reports of over 1.8 billion dollars worth of crypto stolen
from exchanges and trading platforms in 2018, numerous anecdotes from peers losing their passwords or USB devices, and other hacking attempts; we can see that like fiat currency and bond certificates, a secure and insurable method of managing and safeguarding your private keys by a reputable third party is needed by both individuals and entities who are serious about safekeeping their digital currency investments.
Personally, I haven’t carried any meaningful amount of cash with me for almost two decades. The epiphany that cash was a burden happened while travelling throughout Europe.
Risks such as loss didn't have much recourse, currency exchange fees were expensive (double if I exchanged more than needed), and frankly, it was physically cumbersome. I’m not alone, and most of us are now comfortable with a third party bank storing and managing our money in a way that’s easy to access electronically.
Even if you’re dealing in cash all day, who has those shoeboxes full of dollar bills under their bed besides Walter White?
If we think about cryptocurrency, it’s only logical now that the mass market looks for ways to take advantage of digital currencies without needing to be technically savvy. Telling someone to write down their private key on a piece of paper and storing it “safely” seems archaic and counter-intuitive - especially for a significant amount of savings.
Even trusting oneself with a USB-like device, remembering where you stash it, and what your passphrases are, still seems a few steps removed from the main street adoption that all enthusiasts are pushing for.
When we launched Balance
, we initially thought of the individual investor. The case made above is a strong one for using a product such as Balance Now
to safely store your digital assets. Through the strong KYC and AML compliance regime we’ve put in place (since day one), we know our customers, as well as a traditional bank knows theirs. Have you lost your password or your phone?
We built technology to store all our customer’s assets in segregated wallets that remain guarded and stored offline with military-grade security precautions. To mitigate against market volatility and streamline multi-currency support, we built a new piece of technology, called the Digital Asset Cache, which further enhanced the security and management of private keys to prevent hacks or rogue actors accessing our client’s funds. Think of Balance Now as a safe haven for your digital currency investments, as you retain the full legal title to your assets.
After pitching our solution throughout 2018, we soon realized that perhaps we were initially too limited in the scope of who could use this technical solution. The additional benefit of this technology was to help the OTC desks, the public exchanges and trading platforms whose assets were at continually at risk.
Those same platforms that lost over a billion in 2018. So, earlier this year, we launched a brand new product we sell under the Balance Custody
moniker for institutions who need a reputable and insured third-party custodian to store their digital assets.
We offer secure storage of fully segregated warm and cold wallets under legal bailment, enable multi-sig approval flows, secure offline private-key storage, all redundancy and disaster recovery compliant, with the strictest standards suggested by the financial and government regulatory bodies that we are more than happy to work alongside.
We see this as a natural and progressive evolution for the usefulness of cryptocurrency and the health of the ecosystem. The anecdotal number for the value of assets lost or stolen from individuals is much higher than those publicly reported by the platforms (with estimates going as high as 4 billion Bitcoin alone
according to one estimate in 2017).
As the inherent value of digital currencies continues to grow and the demand continues to rise, user-friendly and intuitive platforms such as the ones we’re building at Balance will become the instrumental framework for institutions and individuals alike.
You can still store your rainy day fund (or private key) in a cookie jar, but when it comes to your personal or institutional savings and investments, we must learn from some of the lessons of the past, evolve with the technology, and think wisely about how and where our wealth is stored.
Learn more about the solutions we’re building at Balance by visiting us at balance.ca
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