Amber is a fast growing bitcoin-only startup that focuses on streamlining the early phase of a bitcoiners journey. Winner of the Finovate Middle East “Best of Startups,” Amber has a best-in-class dollar-cost-averaging tool for its users, and it places the highest priority on security, using Unchained Capital’s collaborative custody solution to safeguard client funds.
Collaborative custody is an innovative, bitcoin-native approach to securing funds – bitcoin private keys are distributed among multiple parties in different organizations, and all keys are cold stored. This structure leverages the built-in security properties of bitcoin multisignature while relying on multiple institutions to diversify key management and better protect against risk of loss. In this case, Amber remains in control of client funds, but is able to leverage Unchained Capital’s technology as well as its key management responsibility to deliver greater value to its clients.
Whereas traditional custodians retain full control of keys, collaborative custody allows companies and individuals to interact in a bitcoin native future. Unlike the traditional account structure of the legacy banking system, where clients have an account and must request access to the funds they store with the custodian, clients hold their own private keys, allowing them to authorize transactions in collaboration with either their business partners, or by collaborating with Unchained Capital. By leveraging collaborative custody, Amber is helping its clients in their introduction to bitcoin by securing funds in the best possible way – multisignature with private keys cold-stored and distributed across multiple institutions.
We caught up with Aleks Svetski, CEO of Amber to learn more about Amber and why he chooses to store client funds in collaborative custody.
Why did Amber decide to be bitcoin-only?
Bitcoin only was definitely not “in vogue” when we started building Amber. The prevalent theme was (and to some extent still is) listing multiple coins as if they’re multiple assets for people to trade.
This was never our business model, nor our raison d’être.
Our goal was always to help people accumulate bitcoin because it’s the scarcest and most important monetary unit known to man.
There’s never been an opportunity with so much asymmetry for the “everyday” person to have exposure to. And this is why Amber exists.
As a bitcoiner, what are your thoughts on holding private keys?
One of bitcoin’s most incredible features is the fact that you can be a master of your own wealth. In holding your own private keys, you are genuinely in charge of that wealth in a manner unlike anything we’re used to today.
This financial sovereignty, whilst powerful, also comes with inherent risks.
When you are in charge of your own money, you are also responsible for keeping it safe – and therein lies the trade off.
“With great power, comes great responsibility”
Why does collaborative custody make sense for Amber?
This responsibility and ownership of one’s wealth is where collaborative custody comes in.
It allows the owner of this wealth to spread the risk associated with being in charge of it.
At Amber, we help thousands of people acquire and accumulate bitcoin, the majority of which are first time users and have very little understanding of the complexities involved in guarding or securing your bitcoin.
This means we have to store their funds for them.
The advantage we have at Amber is that we’re “bitcoin-only” and primarily “buy-side”, which means we can hold 100% of funds in cold storage. Collaborative custody just takes that up a notch.
What are the major benefits of collaborative custody over alternatives? What are some risks of other custody solutions?
As mentioned earlier, we’re well-versed with cold-storage at Amber.
Traditionally that meant running a set of wallets in which we “sharded” private keys and ran a set of shamir-secret-sharing schemes to manage those keys.
Whilst possible, it is not only complex to manage, but has risk associated with it; for example upstream hardware wallet manufacturer risks.
Collaborative custody allows us to do much of the same multi-party schemas, but in a way that spreads the risk across multiple hardware wallet manufacturers, multiple unrelated users, and an extra layer of sharding previously unavailable. Ultimately, Amber is in full control of the funds through our own secure private keys but we leverage Unchained’s expertise, key management technology and Unchained as a backup keyholder to increase security.
What are some of the challenges with collaborative custody, and why is it worth it to overcome them?
Collaborative custody does require a new set of tools in order to use effectively, but it’s a small price to pay for increased security of funds.
Amber and Unchained Capital to the moon
Bitcoin unites the entire world under a single, neutral currency, and it allows companies across the globe to join together in the new global economy.
Amber and Unchained Capital are two companies at the forefront of this revolution, with Amber helping Australian clients with a seamless way to dollar cost average into bitcoin, and with Unchained Capital delivering bitcoin native financial services to clients internationally through collaborative custody and distributed private keys.
Schedule a demo with our Vault Concierge Team to see if collaborative custody is right for your business.