for Bitcoin.com in
January, Tanzeel Akhtar explains that, according to research by the Bank of
New York Mellon, there is ‘increasing demand in the market for a traditional,
established custodian to provide secure storage of cryptocurrencies.’ “For many
it is the bridge that will support institutional capital moving into the
cryptocurrency market,” Akhtar added.
This need for an extra layer of reassurance – as the crypto markets begin to stabilise following a volatile 2018 – has led to startups forming around providing greater security. Lacero, with its FlowOS product, is one such example. On the eve of Blockchain Expo Global in London – at which Lacero is a sponsor – The Block caught up with Conner Nudd (left), product and UX lead at Lacero, to discuss the next wave of blockchain technologies, as well as the Achilles heel of institutional security.
The Block: Hi Conner. How did
Lacero come into being and what was the inspiration for starting the company?
CN: Lacero’s founders came
together from diverse backgrounds that collided to create the inspiration for
Lacero. Rashid [Hoosenally] spent 24 years in trading, and understands
the type of robust security, control and compliance environment a well-run,
regulated institution needs for successful operations and scaling. He also
knows that getting the middle and back office right is essential to
Stuart [Winter] and Yuri [Vizitei]
have a combined 60 years’ experience in enterprise data security, encryption,
distribution and sharding. They saw the potential for blockchain and smart contract
technology to transform security, key management and control
TB: What differentiates FlowOS
in your opinion from other solutions on the market?
CN: Most solutions that offer M
of N consensus approvals do not provide the granularity of approval policy
or compliance and governance tools that institutional users need.
Existing offerings are invariably not secure – they form a semi-secure
layer on top of the blockchain rather than an inherent part of it.
Lacero’s FlowOS platform is the first that does, and the only one that
has this level of functionality in an end-to-end secure blockchain architecture
TB: What have customers/investors
been telling you about what they require/desire in a custody solution and why?
CN: Every firm is different, so
they need flexibility and configurability. They need speed, certainty,
reliability and scalability. They need to delegate tasks to multiple
employees, but cannot fully delegate authority. Insiders have been the Achilles
heel of security in many recent cases of loss and theft.
Finally, they need autonomy and
non-reliance. They cannot ever be put in a position where they have
critical dependencies or points of failure with any vendor or provider, whether
in terms of people or technology
TB: In the same way that cloud
computing initiatives have frequently required a further degree of management
is this the next step for blockchain technologies in order to get past the
‘crypto winter’ and achieve mass adoption in your opinion?
CN: Absolutely – and we
believe that improving solution quality means self-custody has to be an
important part of the landscape. We also believe that excessively bundled
solutions will give way to specialised, modular ones. Best-in-class
solutions for each different aspect of the requirement set will be selected and
TB: What are you looking
forward to most at Blockchain Expo and what are you looking to get out of the
CN: Showing people what we can do!
We’re very excited by both our next-gen architecture and our completely
unique feature set. Because we are configurable and cost-effective, we
think we can serve many different clients, from big to small, simple to
complex. We believe we can improve nearly any organisation’s existing
TB: What does the next 12
months hold for Lacero in terms of roadmap/strategy?
CN: We’d like the opportunity to
prove that we can take any existing custodial arrangement and improve on
it. Flow OS can be used either ‘instead of’ or ‘in addition
We’re also very excited about the possibilities for GridHSM in large-scale deployments. It’s a wonderful example of how blockchain technology can take something that already exists in the non-blockchain world and make it better in every way. Anyone sceptical about the ability for blockchain thinking to solve real-world problems should come and see for themselves!
Interested in hearing more in person? Find out more at the Blockchain Expo World Series, Global, Europe and North America.
The post Why existing blockchain custody offerings are ‘invariably’ not secure – and what can be done about it appeared first on The Block.
Credit: Blockchain News