Any type of money is an instrument to provide necessary goods beyond and above the level of necessity. In case an individual has an outstanding amount of the accepted matter of exchange it attracts other people, among them – neutral merchants, regulating authorities and many other parties engaged in the turnover of currencies. The most negative group is criminals aiming to separate the owner from its funds. Digital money cannot be robbed (as long as You are not carrying a hard drive). However, the technology goes forth and no electronic wallet is absolutely protected from possible intrusions and violations.
The most experienced users would give unanimously the advice to go for offline storage, with an enormous encryption, with the key in mind, not on paper. To increase the level of safety – destroy the PC that was used for buying coins and do not use the money too often, see it as a long-term investment that will pay off, when the price will hit several thousand as it is foreseen by most successful entrepreneurs.
Some months ago James Howells was willing to sort out the local dump to find his accidently “lost” hard drive with 7500 BTC, a real fortune at present prices. The limited access to the mined Bitcoins was the reason of this terrible fault. The most modern storage is at the same time highly reliable, but variously accessible by the initial owner. Elliptic, a UK based company is a storage service supported by Lloyds of London. Tom Robinson, the founder, says:
“Before Elliptic Vault, people thought that they had no choice but to take sole responsibility for safekeeping their Bitcoins – still a fairly technical task beyond the capabilities of many people.”
The methods to provide safety are different. The technological means aim to protect the stored funds physically – from intrusions, hacking and general loss of data. Insurances have to cover the costs after some losses have taken place. Still, the primary goal is to receive trust from customers, to widen the network without attracting too much attention from possible criminals. This idea is confirmed by Mr. Robinson:
“The primary concerns [we have found] have been around customers being willing to trust Elliptic to take care of their hard-earned Bitcoins. We need to earn that trust.”
The company tries to meet its audience by organizing and supporting cryptocurrency events - the recent one is the Satoshi Square in London. It has fruits – almost a half of the clients are located in the UK, a remarkable part is from the USA, and the most distant users are registered in South Korea. The service is not free of course; it charges 2% of the stored amount per year and logically the absolute numbers vary in dependence of the exchange ratio. The possibility to insure is also used – the preferred option is a limited liability of £5,000 and upwards. Knowing that bank accounts in traditional banks are free or charge preset fees, Mr. Robinson remarks:
“One of the great advantages of cryptocurrencies is that if you have the skills, you can very effectively protect and take responsibility for your own wealth. But for those who cannot or do not want to, it’s a positive step to be able to rely on a trusted third-party who will do this for you.”
The Elliptic enterprise seeks for development methods, among them the set-up of an online exchange service. Other ideas consider less covered features of the Bitcoin and its protocol, for example, smart contracts. Although the plan will not be implemented as long as the storage service has gained the awaited momentum and is going to run almost automatically. Now, Mr. Robinson concentrates the available power on the storage function as he believes that paying out the insurance would be a disaster for their image.
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