An increasing number of businesses are looking for ways to leverage bitcoin, whether as an active strategy or by holding it in reserve as a treasury asset. With the recent OCC interpretive letter giving nationally chartered-banks the greenlight to pursue custody strategies and with companies like MicroStrategy and Snappa leading a trend of shifting cash reserves to bitcoin, business adoption is becoming more mainstream by the day.
“MicroStrategy has recognized Bitcoin as a legitimate investment asset that can be superior to cash and accordingly has made Bitcoin the principal holding in its treasury reserve strategy.” – Michael Saylor, MicroStrategy CEO (link)
“Providing custody services for [bitcoin] falls within these longstanding authorities to engage in safekeeping and custody activities. As discussed below, this is a permissible form of a traditional banking activity that national banks are authorized to perform via electronic means.” – OCC interpretive letter (link)
As these trends accelerate, there will be a flood of new businesses demanding bitcoin financial services, and the first mission-critical problem to solve is custody. If a business is to leverage the strengths of the bitcoin protocol and own bitcoin as a reserve asset, it must first become comfortable with custody and security of the asset. While bitcoin gives businesses the ability to secure cash reserves without exposure to counterparty risk, historically it has been too difficult for businesses to do so, and as a result, most early adopters have relied on third-party custodians to secure their bitcoin, which leads to centralization and worse security outcomes for businesses.
Just as individuals hold private keys as a standard in bitcoin security, so too should businesses, but businesses have different challenges and priorities than individuals. Businesses often have a number of shareholders, investors, or partners and multiple employees share in financial controls. For many businesses, financial controls are equally, if not more important than sovereignty, censorship resistance, and avoiding counterparty risk. While holding private keys can materially increase security, entrusting any single employee or representative with private keys is usually not an acceptable trade-off for companies interested in eliminating counterparty risk and protecting against censorship.
Advanced Business Accounts by Unchained Capital
Many businesses are already securing bitcoin with Unchained’s basic business offering of collaborative custody. The release of our advanced business suite provides a significant upgrade and allows businesses to secure their own private keys while creating redundancy and distributing financial controls to match the governance structure of a multi-person organization. Businesses now have a custody option that removes counterparty risk, eliminates single points of failure, and allows multiple members within an organization to easily collaborate with each other. Holding funds in collaborative custody delivers greater security and places unilateral control in the hands of a business, while removing the trust required with a third-party custodian or with any individual within a company.
- Complete control over funds, eliminate counterparty risk
- Private keys replace weaker forms of authentication
- Account level controls augment bitcoin private keys
- Multiple members within business can collaborate
- No single point of failure, native bitcoin multisig
- Best-in-class security partner
- External spending available by default with Caravan
Multiple individuals within a business can hold keys, whether a combination of a CEO, CFO, controller or others, without any single individual able to unilaterally move funds. Instead, multiple individuals must collaborate to move bitcoin, creating redundancy and protecting against both internal and external attack vectors. Additionally, businesses typically have certain users, whether internal or external, that need different permission levels, including view-only access to an account in order to audit and report on bitcoin held in treasury. Permissions can be set at the individual level and changed as the organization changes.
Our custody suite provides companies with greater flexibility to invite team members to manage bitcoin and to set different access-controlled permission levels. For businesses demanding the security of private keys and requiring advanced business logic and system controls, our advanced business account is the premier tool available.
Building business logic on top of a secure collaborative multisig base means that companies have the system level controls familiar to a traditional banking suite combined with the unparalleled bitcoin native security of multiple cold stored private keys. Without private keys, third-party custody solutions rely solely on system-level and process controls for security, which becomes a single point of failure in itself. With Unchained’s collaborative custody, system-level and process controls augment private keys, resulting in greater security than could otherwise be achieved if relying exclusively on one or the other.
With our advanced business accounts, your company’s bitcoin has zero counterparty risk, meaning your bitcoin is not a liability of Unchained Capital or any other third-party. By controlling private keys, your business never needs permission to access funds nor is it at risk of censorship or the insolvency of a third-party custodian. Our open source application (Caravan) can always be used as a backup channel to securely access funds, should your business ever lose access to its account for any reason.
What types of businesses should use collaborative custody?
Large and small businesses alike are increasingly seeing benefits to holding or interacting with bitcoin, but until now, it hasn’t been easy for these companies to hold private keys securely and in a way that provides redundancy and distributed financial controls. Our advanced business suite is perfect for a wide range of businesses that hold bitcoin:
Operating businesses – With recent headlines from MicroStrategy and Snappa, more and more businesses are beginning to hold bitcoin on balance sheet as a way to preserve purchasing power of company funds. Whether your business is bitcoin-centric or not, our business accounts are the most secure way to custody bitcoin held in treasury. There is no insurance or qualified custodian that can replace the security provided by holding private keys as a business.
Family offices and investment funds – If it’s your family’s wealth secured in bitcoin, take control of your private keys. Whether a family office or an investment fund, eliminating counterparty risk is a critical long-term aspect of security. Gone are the days where family offices and investment funds must accept the counterparty risk of other businesses as a default position.
B2B2C – Any bank or bitcoin company servicing end users can leverage our collaborative custody. Rather than build custody infrastructure from the ground up, requiring expertise that most businesses do not have, our platform reduces the investment burden and lowers risk while ensuring the most critical component of the custody chain remains in the unilateral control of businesses serving end clients: private keys.
Advanced Business Accounts Initial Release
Client-controlled multisignature vaults already help business clients secure and manage their bitcoin, and now vaults have a more complete suite of features necessary for businesses to effectively hold their own keys.
The advanced business accounts initial release grants companies the ability to add multiple user types to their business account with different permissions.
- The Owner is the principal owner of the company account – owners will set up the business account and invite users.
- An Administrator has full functionality – administrators can author, sign, and broadcast transactions as well as invite other users to the business account.
- A Viewer has read-only access to the corporate account – viewers can log-in and audit transactions as well as download monthly statements for accounting purposes
All of these users have unique logins to access a business account with views of vaults and loans tailored to their specific needs. As with basic business accounts and individual accounts, advanced business accounts grant users the ability to create as many vaults and request loans as frequently as needed to best manage company assets. There are no additional charges for adding and creating new vaults.
Additionally, businesses will have access to a growing suite of services, including currency exchange, which is in its pilot phase and currently available in a limited number of states. Users are also able to easily switch contexts from their personal accounts to their business accounts, so Unchained Capital clients can seamlessly log into their accounts with one email address to serve both personal and business needs if so desired.
What Does the Future Hold?
We’re building an enterprise product for businesses of all sizes, with fine-grained permissions for all workflows that impact businesses managing bitcoin. In future releases, we will give users specific abilities, such as the ability to author, approve and/or broadcast transactions, or the ability to sign transactions only. These granular roles improve auditability of the signing workflow and give your business more flexibility with how you staff the bitcoin treasury team.
The immediate roadmap includes the ability to set permissions by individual per key and advanced transaction permissions. Advanced business accounts are indicative of a growing circular bitcoin economy. The unparalleled security of bitcoin multisignature delivered through a collaborative custody platform makes your company treasury more secure, and partnering with a team of bitcoiners to remove the burden of building and managing financial controls internally at a company allows your business to focus on its core competencies.
Collaborate with us for the security of your company’s bitcoin. Email us at Hello@unchained-capital.com to learn more