Our portfolio company Coinbase has been building an institutional grade regulated custodial service for crypto assets over the past 18 months. It is called Coinbase Custody and it is a qualified institutional custodian which means that investors that are regulated can use it to satisfy their custodial requirements.
Coinbase has been providing safe and trusted custody for crypto assets for most of its seven year history. It has led the industry in developing secure storage of crypto assets. So it is the obvious place for institutions to turn to custody their crypto assets.
Yesterday, Coinbase Custody announced that they now support custody of over 30 of the most popular crypto assets.
Coinbase Custody operates as a standalone, independently-capitalized business. Coinbase Custody is a fiduciary under NY State Banking Law. All digital assets are segregated and held in trust for the benefit of their clients.
If you want to learn more about using Coinbase Custody as your institutional custodial solution, you can reach out here.
Been following it.Interesting that they appear to have rolled in staking as a service and network participation as a bundle with this service.Believer that this is going to be a significant investment vehicle.
Found this link useful for my brain: https://www.sec.gov/investo…
I reviewed the crypto custody market last year, and there are now close to 50 diversified solutions. Coinbase Custody stood out as one of the top institutional ones, for many reasons.Switzerland and the US are leading countries in this area. No surprise, due to the Swiss banking legacy who is taking crypto very seriously.
Does anyone see the irony in the ‘Swiss banking legacy’ being so sympatico w crypto?Or is it just me?
I agree. Decentralized finance is unlikely to scale to ubiquity unless it is backed by names which have accumulated trust over the decades (cough cough centralized) anyone :-)”The Queen is dead, long live the Queen” 🙂
+100.Any logic based assessment comes up with black market as the only real transaction basis for a consumer ( not an internal JPM coin ) style crypto play.
Centralized custody is against the original bitcoin idea but many people are not good at securing anything. We forget passwords, we lose the keys etc. We want to be able to say “I forgot my password, I lost my keys. Here is my ID, I want to access my funds”. Just like regular banking. We need non-custodial wallets with similar functionality. Evercoin is doing that. Even if you lose your phone or forget password, with a recovery email and ID you can recover all your funds.
They are very serious. Take it from me who was there every month of last year.
They were always serious, but they were also never mainstream.There’s a reason most people associate Swiss Banker w James Bond or Jason Bourne….
Not sure that people fully appreciate Qualified Custodian vs. a company offering custodian services. The RIA’s etc. get it, but 99.9% of the others don’t appreciate the true difference.
Yup. Custody a big deal. I have heard of “we put all your crypto on a stick and then lock it off the net in a safe”. Obviously, not scalable
If they computerize everything, then they will need some darned solid computing. For my startup, I’m just hoping that everything will work fine typically for some weeks before anything quits, then somehow I’ll “do a switch over and hope I don’t get a burnout.”.Would be interesting to learn about the main computer and network architectural issues for especially reliable computing using PC-level hardware and software, e.g., chips from Intel or AMD, operating systems, Linux or Windows Server, solid things with database, e.g., SQL Server.I’m beginning to pick up some of the techniques: E.g., my startup needs a key-value store for Web user session state. Okay, I wrote one quickly. It worked fine right away — it should have since it was dirt simple, just routine use of TCP/IP sockets, two instances of a standard Microsoft .NET collection class (hopefully AVL trees), and de/serialization of instances of some classes.But recently on Hacker News I read that for a good Web site, more is wanted: The idea is to have several of everything, several Web servers, several session state stores, etc. Then should be able gracefully to shutdown whole parts of the server farm, including Web servers, session state stores, likely also data base, and have the remaining boxes take up the load with no users noticing anything wrong.For this, e.g., for a key-value store, should be able to take the key-values in a box to be shut down and send the pairs to another key-value store. In the key-value store I wrote. I didn’t include that feature! Well, there is now a famous key-value store with lots of functionality, Redis. So, likely Redis has the functionality needed — take several parts of the server farm offline, maybe do some maintenance, maybe replace some boxes, etc., and come back online with users noticing nothing wrong.Six parts of such architecture seem to have been serious for some years: (1) Relational database is awash in functionality for reliability, security, duplication, etc. Uh, since relational data base is where banks keep the money, right, that word, money, people take reliability, AND security, SERIOUSLY, and have for decades. (2) A Cisco box between the Internet and the servers can be smart enough to route traffic to the Web server boxes that are still running AND give users server affinity so that each time they send back to the Web site their data goes to the same Web server (that presumably has the state of the user without having to go to a session state store), (3) uninterruptible, that is, with battery backup, sources of AC power, (4) run the whole server farm off batteries, charge the batteries with the electric utility when it is so willing, otherwise bring up an appropriate Diesel generator, have more than one of those, and test them, say, once a week, (5) have more than one direct fiber connection to a node on the Internet backbone, and (6) have a backup site a few hundred miles away that can switch all the users to without their noticing.I’m getting the impression that such reliability is a fairly well known art.But there was the guy who started Plenty of Fish, just two old Dell servers and $10 million a year just from Google ads. As is widely known, he sold out for about $550 million. No doubt his two servers were just at the beginning, to generate enough revenue to have more servers and start to use some of the 1-6, etc. reliability techniques.So, when do we notice that a server is starting to go bad or in part has gone bad? Well, apparently it remains that I did some of the best work on that — a quite general anomaly detector with some good properties! I published in Information Sciences, but I can believe that it has gotten maybe only the average number of readers, a few, with no attempts at deployment.I also gave a talk on the work at the main NASDAQ site in Trumbull, CT and there saw some of the 1-6 deployed. They were fully, solidly serious about reliability and security!When I reach the “big time,” if I do, maybe I should chat with some server farm software/hardware/HVAC/network/power architects from any of the big, solid server farms, say, a big bank, Google, Microsoft’s MSDN farm, etc.
Okay, I wuz wrong!!There’s the idea of dowsing sticks. I don’t think they will ever work and, thus, eventually people will give up on them. BUT, it turns out that a lot of people are interested in dowsing sticks and need, say, carrying cases. Soooooo, go into the business of making carrying cases for dowsing sticks. Same for convertible tops for bicycles, electric powered roller blades, etc.Hmm ….
You prioritize around the big wallets. Smart.In the meantime I am waiting for the day when I am not forced to use Binance for things because Coinbase cannot support them in NY. I hope someone from there sees this comment.
Keep an eye on NodeSwap. In the Staking as a service world they are building a slotted ownership model for retail investors for PoS coins.Big fan of this passive income asset class for small investors.Out of Asia.
It is just f**ing brilliant the way Coinbase is dominating the “picks and shovels” part of the crypto gold rush.
Is it? Seems antithetical to me, and it’s still boosting Litecoin. One wonders why that might be?
What I mean is that they seem to be making money from the storage and movement of money. That way the entire enterprise does not hang on the rise and fall of any one crypto asset. Maybe I don’t understand the business well enough. I know there are lots of issues in the details, but the positioning makes sense to me.
Totes agree.Custody will be a barometer for Crossing the Chasm mainstream adoption.If the business fails, then you know crypto is not a mainstream asset.Coinbase incredibly well managed, even if their revenue has fallen off a cliff.
It’s more than that even.If you dig into this they are using the custodian service to launch their staking as a service investment service in really innovative ways, now for institutional eventually for everyone.This is a big deal as for me at least being able to invest cross slotted master and incentivized nodes as a portfolio is a huge leap forward into a completely new asset class.
Arnold – can you explain “staking as a service” in a layman’s terms, please? What is being “staked”?
I tried here:Staking as a service http://arnoldwaldstein.com/…Kinda need to internalize the differences between PoW and PoS which in its own right is interesting and core to blockchain architect.Hope it gets you hooked as fascinating important stuff.
It is and I like your writing style. Very conversational and honest 🙂 Had a few questions I raised via comments on your blog post. Thanks for the pointer.