We all love MicroStrategy, Square and Stone Ridge making headlines. Shifting tens of millions to hundreds of millions in treasury assets to bitcoin changes the ball game, but bitcoin is just as important, if not more important, for individuals and small businesses. At Unchained, we support a wide range of businesses, and are particularly proud to be serving small business owners. In many ways, small businesses have been disadvantaged by the legacy monetary system, which tips the scales towards centralization and in the favor of large corporations. Bitcoin is a tool that levels the playing field, and small businesses stand to benefit as much, if not more, within the spectrum of business adoption. Despite this, the leap for small business owners can seem more daunting and often carries with it a different risk calculus.
Businesses have different challenges and priorities than individuals when it comes to bitcoin. Managing working capital and treasury accounts as a business is not the same as just stacking sats as an individual. We think about both individuals and businesses at Unchained because many of our clients operate across both contexts. While we expect this trend to accelerate, we’re already empowering a number of small businesses today that have decided to shift treasury assets to bitcoin. As more businesses have become public about decisions to hold bitcoin, we thought it would be valuable for small business owners to hear the perspective of one of our clients that recently made a similar decision, leading the way even before recent announcements from Microstrategy and Square.
We asked our friends and clients who run a Minneapolis-based business, Elevated Beer Wine and Spirits, if they would be comfortable sharing their perspective. The owners are long-time bitcoin holders and agreed to share their thoughts and experience for the benefit of other businesses that might be in similar situations and facing similar decision points. For background, Elevated BWS has been accepting bitcoin as payment for a number of years, but decided to convert 80% of its cash in treasury to bitcoin earlier this year (and before it became popular to do so). We caught up with one of the owners, Ryan Widuch, to learn more about why they hold bitcoin in treasury and why they selected Unchained Capital’s Business Accounts to help them custody their own bitcoin.
Why did you decide to convert a portion of your business treasury into bitcoin?
We have been accepting bitcoin as a form of payment at our stores since 2014, initially looking at it as a way to reduce merchant services fees and to generate more exposure for the network. After accruing a fair amount of bitcoins this way, the subsequent 2017 bullrun, worsening macroeconomic conditions, and a deeper dive down the bitcoin rabbit hole, we decided to build upon our bitcoin holdings by reallocating nearly all (80%) of our treasury into bitcoin to help protect its long term value.
How do you think about security for the bitcoin held by your business?
Security for our bitcoin has always been extremely important to us. We’ve never kept our bitcoin reserves with an exchange or with a payment service provider for this reason. There is nothing that can provide greater security in bitcoin than holding private keys, whether an individual or business. However, securely storing our bitcoin and minimizing trust among our partners was challenging with the single signature hardware wallets we were using. This spring we learned more about multisig and how it could potentially help with these issues. After exploring numerous options, we decided to enlist the help of Unchained Capital to implement our multisig set up with collaborative custody.
What is different about securing bitcoin for a business than as an individual?
With multiple partners in our corporation, it became a bit more challenging than securing bitcoin as an individual. Despite having a high degree of trust within the company and among partners, it has always been our goal to eliminate single points of failure, which used to be difficult to achieve. But with the multisig collaborative custody options provided by UC, things came together rather naturally and gave us the flexibility to leave all parties comfortable with the security and trust in the set up, knowing that no single individual or party has unilateral access to, or control of, our bitcoin.
Why did you choose collaborative custody with Unchained?
We knew that setting up a multisig quorum on our own was not an option. It was something that we could have probably figured out, but did not have the time or confidence to pursue. We also knew that, given the fact that we have multiple partners in our corporation, it was important to have a third party assist in the set up, be there to create confidence, and provide some oversight in the security and access to funds. Not only were UC’s technology and interface the best we saw while researching options, but they also have some of the most experienced and professional people there for support. Add to that a stack of easily accessible, integrated financial tools and we knew that Unchained Capital was the right choice.
What is the future for small businesses and bitcoin?
In the short and long term we see it as a perfect hedge against the ongoing money printing by central banks around the world, especially for cash flow heavy businesses. And, as bitcoin’s market cap increases, we see an array of use cases opening up for small businesses, including our initial attraction of reducing the cost of payments, by way of the Lightning Network. Our bitcoin reserves will also allow us to reduce the need for the legacy banking system and lines of credit as we can instead leverage our bitcoin reserves to provide any needed liquidity.
Any last thoughts about bitcoin for small businesses?
Given the state of our economy and global monetary policy trends, we believe that it is now the fiduciary duty of company executives to allocate a portion of their treasuries to bitcoin. Holding bitcoin on our balance sheet for over six years has given us the perspective to see that bitcoin truly is a store of value and a protection from the devaluation of the dollar. Due to their nimble nature, small businesses currently have a chance to get out in front of this trend and set themselves up to create enormous opportunities for their companies, employees and the customers they serve; potentially creating a shift in the competitive playing field between large corporations and the small businesses that have the foresight to recognize these facts.
Unchained Capital’s goal is to deliver services that meet all of our client’s personal and business bitcoin needs. In working toward that goal, we recently launched advanced business accounts to complement our collaborative multisig vaults, loans, and bitcoin OTC desk. We recognized that businesses like Elevated BWS holding bitcoin as a cash reserve will demand the unparalleled security of a custody solution built on the foundation of private keys, just as individuals do. Through our development process, we solicited feedback from existing business clients to deliver a product tailored to the needs of a multi-person organization, but with the flexibility to manage both personal and business bitcoin in one easy-to-use interface.
Our Advanced Business Accounts are perfect for companies of all sizes interested in securely their own private keys. Reach out to us at email@example.com to learn more about how we have layered account and system controls common to a traditional banking suite on top of native bitcoin multisig to deliver the most secure and flexible way for businesses to manage their bitcoin.