On July 10, the security startup BitGO announced that it will diversify its suite of custody products and services in order to support 57 new Ethereum assets. With the demand rising for services that safeguard private keys, the platform will cater to it. This clearly shows that the blockchain security industry is in the middle of a changing competitive landscape. Therefore, the addition of these Ethereum assets could be a key move.
BitGo CTO Benedict Chan said that the demand for custody solutions for alternative crypto assets has escalated quickly. Ever since its inception in 2013, BitGo has gone on to become and industry leader managing wallets at crypto exchanges.
“These institutions, they generally don’t want to self-manage their coins. They are looking for someone that can support multiple coins.”
However, it faces a lot of competition from a few institutional custody services namely, U.S. exchange provider Coinbase, the Swiss startup Smart Valor and Japanese bank Nomura.
Timothy Furey, CFA and head of banking at Satis Group, termed the industry trend as an “arms race” institutional solution for a wide range of assets. And this could be verified when the BitGo’s VP of product marketing, Robin Verderosa, said that it is now aiming to obtain a BitLicense in New York, a qualified custodian license in South Dakota and a suite which offers services for over a 100 cryptocurrencies by the end of 2018.
What is worth nothing is how BitGo has been continuously trying to ensure the quality of its service keeping in mind the risks in dealing smaller cryptocurrencies which include Kin by the chat messaging app Kik, several native tokens for decentralized crypto exchanges and the blockchain identity crypto Civic.
Product Manager at BitGo Issac claims that his team researches on every token requested by the customers to ensure the reputation of the token. After which the tokens are added to the suite. His team also keeps a vigilance on the token issuers if they are planning on code changes along with quarterly security evaluations.
Along with BitGo, Smart Valor is also in the race to serve institutional crypto investors. It plans on offering the on-site storage of private keys and other services drawing parallels with deposits in a bank, in a partnership with the hardware wallet maker, Ledger. Bitcoin CTO Chan said that Ethereum tokens are vulnerable to issues caused by bugs in a smart contract. And it is mainly because of this reason, that both, Bitcoin and Smart Valor are planning on providing secure custody for tokens, not just Bitcoin.
“There’s a lot of different events that have happened because of smart contract bugs. So, we try to be on the safer side there.”