Many pundits believe institutional participation is key to the growth of the Bitcoin and broader crypto asset market. With many companies now creating innovational ways to help expose institutional investors to crypto, the industry is awaiting an influx of institutionally-sourced dollars to boost this nascent market.
A leading digital asset exchange, Seed CX, aimed at institutional investors, has recently revealed their unique segregated wallet solution, which features on-chain settlement.
ZeroHash, a FinCen-regulated settlement subsidiary of Seed CX, is aiming to attract institutional greenbacks into the cryptocurrency market by releasing a storage solution, which features improved security measures and enhanced transparency.
Divide And Improve Security
To improve security, each investor will receive a unique wallet for each asset, where the address is altered daily, or when holdings are moved between wallets. This feature beats having all assets grouped into one wallet (which could be prone to cyber-attacks) or spread across an array of shared wallets — a security-conscious practice that exchanges often enlist.
By spreading their clients’ holdings across multiple wallets, risks, like having holdings seized by internet criminals, are drastically reduced. Immutable record-keeping is also made possible, as ZeroHash is able to sync its internal accounting on a blockchain, which improves transparency — one of this technology’s benefits (and downfalls). Users will be able to view all activity associated with their wallets externally, as well as having the ability to confirm all transactions initiated by ZeroHash.
Chief executive of Seed CX, Edward Woodford stated:
“Seed CX is purpose-built to provide the security and stability institutional investors demand, and the cost-efficiency and performance that large liquidity providers require,“On-chain settlement helps Seed CX provide trading firms with an experience that is both cost-effective and high performance, while also providing the operational and financial security investors demand.”
Staying A Step Ahead
In 2018, reports of crypto exchanges being subject to cyber-attacks skyrocketed. An estimated total of $882 million was stolen from platforms, namely Japan-headquartered CoinCheck, NANO-centric Bitgrail, and Etherdelta. These attacks and subsequent wallet breaches have been chalked up to exchanges not integrating sufficient security measures into their platforms, leading to pertinent vulnerabilities.
Julie Myres-Wood, a public director at ZeroHash, stated that her employer has learned copious amounts of information regarding the many flaws displayed by exchanges in the past, and aims to improve upon said mistakes, providing a more sophisticated solution for institutional investors. Wood explained:
“Zero Hash has learned a great deal from the shortcomings and failures of other exchanges, “Giving participants full visibility into their own unique wallets is a big part of that, but it’s not enough. Zero Hash has a wide range of operational controls designed to provide investors with a first-of-its-kind experience.”
Here Come The Institutions
Many speculators believe 2019 will be the year for institutional investors entering the budding cryptocurrency and blockchain market. Along with proper regulation, security and transparency are what matter most when investors are looking to enter an early-stage market, especially one as historically volatile and risky as crypto. With this hands-on solution, ZeroHash is paving the way for big investors, signalling that a trusted, secure, stable and transparent solution to investing in the digital assets market is possible.