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Bitcoin [BTC] has a new savior? BitGo CEO talks why cryptocurrency custody is important

Akash Anand



Bitcoin [BTC] has a new savior? BitGo CEO talks why cryptocurrency custody is important
Source: Unsplash

In an interview with CNBC’s Brian Kelly and other panelists, Mike Belshe, the Co-Founder of BitGo, spoke about how custody of digital assets will ensure the rapid development of the cryptocurrency space and drive mass adoption.

Belshe spoke about how custody was paramount in the field of something as volatile as cryptocurrencies, pointing out that the concept of custody also attracts institutional investors in a market heavily dominated by retail investors. He also stated that the clamor to make ‘custody for cryptocurrencies’ a reality has been ongoing for a couple of years and that the market growth has certainly been pointing towards the right direction.

The discussion then covered the customers who would be interested to use digital asset custody applications like BitGo. Belshe stated that there were two types of customers, one aggressive and one not so aggressive. According to him, hedge funds, family companies, and such fringes would be the beneficiaries of custody applications. These fringes are indifferent about cryptocurrencies right now but with the advent of a regulatory authority they would be keen to jump into it, said Belshe.

Brian Kelly was curious to know about the time duration taken by BitGo to take assets out of cold storage, an issue faced by a lot of cryptocurrency wallet applications. Cold storage or cold wallets are the type of storage areas that are offline, a method used by some companies to ensure total protection and defense against hacks and fraudulent activities. Belshe replied by saying that BitGo has been in the business for a long time and that the method used by his company was to find a way to marry both hot storage and cold storage. He went on to say:

“Getting assets from cold storage will be slow and you can’t really speed that a lot. Anyone promising that they can conduct extractions really quickly has to be verified thoroughly. We have to know what is going on behind the scenes.”

The Co-Founder also added that at the moment BitGo supported over 75 cryptocurrencies and 10 different blockchains. The panel also talked about the implications of Goldman Sachs reconsidering the Bitcoin [BTC] trading desk idea and explored the idea of Wall Street in cryptocurrencies.

Brian Kelly stated that right now, Bitcoin needs fresh money and this can be made possible by the moving in of institutional investors. He said that although the entry of institutional investors has taken longer than expected, the fact that there has been some shakeup from their side is a positive sign.

BitGo was also in the news recently for receiving a state trust charter to act as a custody for cryptocurrencies.

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Facebook’s Libra ‘sounds an awful lot like Proof-of-Stake’ and will ‘run into Ethereum’s problems,’ claims Jameson Lopp




Facebook's Libra 'sounds an awful lot like Proof-of-Stake' and will 'run into Ethereum's problems' claims Bitcoin engineer, Jameson Lopp
Source: Unsplash

Facebook’s “The Libra Blockchain” whitepaper has created quite a frenzy, not only in the cryptocurrency ecosystem, but also with U.S. government officials. Some people claim that Libra is not a blockchain, while others claim that it is going to kill Ripple, XRP and other similar blockchains. However, Jameson Lopp had a different view, claiming that the Libra blockchain has not solved massive problems that Ethereum has.

Lopp in his Medium article dissected the whitepaper and stated that the Libra Blockchain will be controlled by a set of authorities in a top-down fashion and that it will eventually move from a permissioned to a permissionless blockchain. The blockchain will offer a global currency – Libra coin, which will be backed “with a basket of bank deposits and treasuries from high-quality central banks.”

Since the whitepaper mentions that it will eventually move towards a permissionless and an open system, Lopp speculates that it “sounds an awful lot like Proof of Stake” and like Ethereum, it will face the same problems. He said,

“Apparently the plan is to open up membership after 5 years and hopefully they’ll have figured out Proof of Stake by then… I expect they’ll run into the same problems as Ethereum!”

Lopp added that “Calibra Wallet,” which is used to store the Libra coins, is the only wallet that can hold the coins for now and that it will require strict KYC/AML compliance. Since the blockchain conveniently replaces “stablecoin” for “resources,” Lopp speculates that it will concentrate more on smart contracts since it is built on a custom smart contract programming language called “Move”.

In addition to facing similar problems as those faced by Ethereum, the Libra Blockchain is facing more issues from a political and a regulatory standpoint. There was a lot of speculation even before Facebook dropped the whitepaper.

According to Reuters, United States House Financial Services Committee Chairwoman Maxine Waters issued a statement to halt/pause any and all developments on the project, until and after the Congress and other regulatory bodies have finished reviewing it. A senior Republican, Patrick McHenry, is also calling for a hearing on Facebook’s new cryptocurrency.

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