Find the best broker for your trading or investing needs Custody solutions are the latest innovation to come out of the cryptocurrency ecosystem. Their introduction is expected to herald the entry of institutional capital into the industry.
Here is a brief primer on why crypto needs custody solutions, and the types of custody solutions being offered in the market. The main utility of cryptocurrency custody solutions lies in the safeguarding of cryptocurrency assets. Private keys, which are used to conduct transactions or access crypto holdings, are a complex combination of alphanumerics.
They are extremely difficult to remember and can be stolen or hacked. Online wallets are a potential solution but recent events have demonstrated their susceptibility to hacks.
The same is true of cryptocurrency exchanges. Other solutions include storing private keys offline, on paper or a hard disk (or other electronic equipment) that is not connected to the internet. But losing physical custody (or either the paper or electronic equipment) is a real possibility.
For individual holders of bitcoin, the possibility of losing private keys is a risk; for institutional investors, though, it represents an even more significant risk. The latter go to extreme lengths to guard against this danger. Read more from investopedia.com…
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