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đź”’ Business-Grade Bitcoin Custody

Author

Hector Alvero
September 03, 2024

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Featured Article

Businesses worldwide are exploring ways to integrate bitcoin into their financial strategies. This development isn't just about staying trendy; it’s grounded in solid financial reasoning.

Developing a Strategy

Before diving in, companies need a solid plan approved by the board. Objectives should be crystal clear: Is the goal investment-oriented, or is Bitcoin being used for operational purposes?

Considering Custody Options

Third-Party Custody

A popular option has been to purchase and “hold” bitcoin through a third-party custodian. This reduces the business’s risk of losing the bitcoin since the business does not hold the private keys that allow the bitcoin to be moved.

This comes with a major downside, though. If the exchange where the bitcoin is held becomes insolvent, the bitcoin is lost. This is why self-custody is generally considered the best approach.

In-House Custody

For those who want full access to their bitcoin, in-house custody is a good option. For a small business, this may make sense. But there is risk involved. For instance, if a disgruntled partner or employee gets access to the private keys, the bitcoin can quickly disappear.

Unchained removes much of the risk with their multi-sig solution for businesses. With this setup, Unchained holds one or more of the keys needed to move the bitcoin. In this case, a majority of keyholders must agree for their bitcoin to be moved.

Multi-Institutional Custody

A third option combines elements of the first two. Multi-institutional custody is provided by Unchained as well as others like Onramp that specialize in this area.

In this scenario, the business is not required to hold any keys; rather, it selects various trusted institutions to hold keys for them. These institutions may be geographically distributed to decrease jurisdictional risk.

Curious about the benefits of businesses holding Bitcoin? Read the full post here to find out more.

Meet the Team

Rhino is excited to introduce our VP of Communications, Anthony Praskavich.

Follow Anthony on X for his engaging Spaces with fellow Bitcoiners, and don’t miss his contributions to the hilarious YouTube show, Between Two Asics.

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