Crypto Asset Custody Solutions

Published on
October 6th, 2020
Duration
25 minutes

Crypto Asset Custody Solutions

Expert View - Crypto ·
Featuring Jameson Lopp

Published on: October 6th, 2020 • Duration: 25 minutes

Jameson Lopp, co-founder & CTO of Casa, explains how the custody process for crypto-assets like Bitcoin actually works. He discusses the various risks that companies like Casa deal with when building a new type of custodial system for crypto assets. Lopp goes into detail about the technology used by crypto custodians and what solutions his team has developed to handle the serious risks involved. Filmed on September 22, 2020.

Comments

Transcript

  • AK
    Andrew K.
    1 November 2020 @ 20:22
    I bought a ledger nano x yesterday (UK based) and today I got an urgent text advising me to connect it online for an urgent update. The site was le'dge'r.com - with apostrophe marks above the e's ...how do I know if this is safe? More importantly it does not install confidence.
  • LK
    L K.
    8 October 2020 @ 19:00
    Devil's advocate: if/when an ETF is approved, this will be the biggest driver of mass-adoption and there probably won't be any option for investors to take custody of their bitcoin. This would also facilitate rehypothication.
    • PB
      PHILLIP B.
      20 October 2020 @ 23:31
      Yeah, can imagine a future scenario where if you sell, your Digital US Dollars account at the Fed is credited.
  • SV
    Santiago V. | Contributor
    6 October 2020 @ 14:31
    As Jameson points out, the most likely scenario is that the systemic risk to Bitcoin won't be a 51% attack or even an exchange hack, it's user ignorance. This ignorance will drive people into the arms of institutional custodians that are willing to custody their digital assets with some sort of insurance or brand protection. The end result will be to recreate a re-hypothecated universe of pristine collateral being over-leveraged. This consolidation will make it easy for regulators and governments to exercise their sovereignty over the individual, via the institution. This is why only investors are happy that bitcoin is being institutionalized, the self-sovereign will always hold their own keys. The enemy is us.
    • JA
      John A.
      6 October 2020 @ 15:13
      Can't agree more. But without custodianship, only the most self-reliant person will enter the space. In order for the technology to gain mainstream acceptance, the need for custodianship services is mandatory to more widespread adoption. Keeping a system that allows the libertarian spirit of crypto to exist in the same ecosystem as those who want to outsource their custodianship responsibility is what makes this move to the next level of acceptance.
    • AM
      Alexander M.
      6 October 2020 @ 19:32
      After losing one BTC from my Coinbase account I will only hold GBTC in my Roth IRA, pay the 8-10% premium and never worry about IRS disclosures as any profits are tax free. I transacted numerous times from Coinbase to my Ledger hard wallet but on this occasion my BTC vanished in a flash before I even started the transaction. NEVER again. I am finished with private keys and hard wallets. No matter how careful you are you are wide open to losses through theft and there is nowhere to turn to for help. Coinbase ? Caveat emtor.
    • PR
      Private R.
      6 October 2020 @ 21:52
      Agreed. Even my father at 72 holds all his bitcoin on a hardware wallet. If you hold it on an exchange then you're not really gaining what gives bitcoin its worth, sovereignty. It will be rehypothecated though, companies like BlockFi will make sure of this and people seeking yield. The irony of it is that in their hunt for yield the rehypothecation will devalue the price bitcoin by arguably the same amount.
    • NI
      Nate I.
      9 October 2020 @ 21:35
      Alexander M. I would like to know more about the Coinbase problem you described. So far I haven't had any problem sending btc to my trezor wallet. I'm very curious how yours vanished?
    • AM
      Alexander M.
      19 October 2020 @ 23:42
      Nate I Hi Nate, As I mentioned and having previously made around 12 transactions to and from Coinbase to my Ledger wallet I hadn't even started the transfer procedure to transfer 1 BTC to my hard wallet when my balance showing went to zero in a flash. I am held responsible and nothing can be done about it. Any attempt to seek help is met with official written e mails and is futile to pursue.It leaves a horrible feeling of helplessness and incredulity. Time will tell what the eventual financial loss is but it has to be the case that my loss may be trivial to other losses that have occurred in the same way and with the reluctance of anyone to admit it.
  • KS
    Kathleen S.
    14 October 2020 @ 12:24
    Easier to buy a trezor or ledger nano s ---- you keep your bitcoin and other crypto off line in safe --- if you lose or your ledger or trezor gets damaged you just have a seed code and you store the seed in a couple safe places and you can always get your keys back. Not a big deal --
  • RP
    Richard P.
    13 October 2020 @ 13:27
    ZERO customer service. I have tried to use Casa. I have paid and subsequently sent a customer service request, I have then sent a chasing request due to zero response. Tumbleweed... I am not asking much, only how to set the service up because my Ledger isnt being found by their app. I am not a tech idiot either, so this was not a FAQ-ignoring question, but a real one. Maybe they read this, but I doubt it. I hope you read it though and act accordingly.
    • RP
      Richard P.
      13 October 2020 @ 21:25
      Credit where (limited) credit is due, I have now had a response. Not within 24hrs, but it's a start. However email customer service is never a great solution so Casa definitely could do better
  • DT
    David T.
    6 October 2020 @ 17:56
    Bitcoin is so virtual, you can't even hold it :) The need of custodian for your own money is already plays against crypto.
    • RF
      Richard F.
      7 October 2020 @ 19:47
      This difficulty will be overcome with companies like Casa pushing solutions forward. It is also one of the many aspects that keeps prices low.
    • LK
      L K.
      8 October 2020 @ 18:58
      Companies like Casa aren't custodians. There is no physical analogy for multisignature.
    • Bv
      Berend v.
      13 October 2020 @ 12:18
      1. Ye can. You can hold it. Hardware wallet is 101. 2. Custodial services are one solution. Multi Signature setups are not custodial services. They do not have control over your Bitcoin. 3. This is more important than you think. Do u think these security advancements will not transfer to every other form of digital security? I think they will. In fact, I wish it would be.
  • TS
    Thomas S.
    12 October 2020 @ 04:14
    Great job Jameson! This is really good basic knowledge presented clearly. It's a new world
  • RF
    Richard F.
    7 October 2020 @ 19:45
    Great content, Lopp is an OG.
  • JS
    Joy S.
    7 October 2020 @ 13:43
    Really good point that one of the biggest risk is the user making a mistake. Pathways to mass adoption while avoiding the re-hypothecation issues will be a space I'm definitely watching.
  • CD
    Christopher D.
    6 October 2020 @ 17:54
    For the non-expert interested in becoming more of one: http://www.michaelnielsen.org/ddi/how-the-bitcoin-protocol-actually-works/
  • DD
    Dmitry D.
    6 October 2020 @ 14:12
    Great interview, real insight into a specific and relevant issue of the space which is unfortunately lacking from many if not most other interviews on RV Crypto! This is the type of content that I would like to see (and pay for) here