SLP113 Dhruv Bansal - Bitcoin Multisig & Hermit with Unchained Capital
Oct 4, 2019
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Dhruv Bansal, Co-Founder and CSO of Unchained Capital, discusses bitcoin open source contributions, multisig vaults, and Hermit - Shamir’s Secret Sharing. They explore collaborative custody, the launch of dedicated vault products, and the importance of security in multi-signature transactions. The open sourcing of Caravan, a flexible multi-signature solution, is also highlighted. The podcast covers security risks with web interfaces and precautions to take when dealing with Bitcoin. The decision-making process for multi-signature service providers and the significance of inheritance planning and identity are discussed. Considerations for overseas users are also mentioned.
Unchained Capital uses multi-signature technology to enhance Bitcoin security through their collaborative custody service called Unchained-Vault.
Unchained Capital's open-source web application, Caravan, simplifies managing multi-signature wallets and promotes collaboration in the multi-signature space.
Unchained Capital prioritizes identity verification and explores methods like two-factor authentication and video verification to ensure transaction authenticity and security.
Deep dives
Collaborative Custody and Multi-Signature Vaults
Unchained Capital offers a collaborative custody service called Unchained-Vault, which utilizes multi-signature cold storage. The vaults leverage multi-signature technology to enhance security and enable collaborative control over assets. By distributing keys to different parties, Unchained Capital creates an interesting and compelling structure that utilizes social security and collaboration to increase Bitcoin security. The collaborative custody model is available for both individuals and institutions, providing flexibility in terms of key distribution and control.
Open Source Contribution: Caravan
Caravan is an open-source web application developed by Unchained Capital. It acts as a transaction planner for multi-signature wallets and focuses specifically on Bitcoin. Caravan allows users to interact with their Bitcoin D node and various hardware wallets, providing a simple and secure way to manage multi-signature addresses. Unchained Capital aims to standardize the process of multi-signature transactions and provides an open-source solution to encourage collaboration and improvements in the multi-signature space.
Identity Verification and Authentication
Unchained Capital places a strong emphasis on identity verification and authentication. As Bitcoin is pseudonymous and only recognizes public and private keys, Unchained Capital focuses on verifying the identity and intent of users. They utilize methods such as two-factor authentication, video verification, and other communication channels like email and phone calls to ensure the authenticity and intent of transactions. While security threats like deep fakes exist, Unchained Capital continuously explores new ways to enhance identity verification and maintain high levels of security for their customers.
Seed Phrase Backups and Sharding
Unchained Capital suggests protecting seed phrases by using methods like Cryptosteel or similar products for secure backup. Users can also split their seed phrase into separate parts and store them in different locations, increasing the security of their backups. Additionally, Unchained Capital is exploring the use of Shamir's Secret Sharing and hierarchical sharding, allowing users to split their seed phrases into multiple shares and require a threshold of shares to recover the seed. This approach provides greater security and redundancy in case one share is compromised.
Hermit: A Secure Wallet for Companies
Hermit is a secure wallet designed for companies that need a solution for multiple users to interact with at once. While it may be complex and not recommended for average users, organizations that require protection for their keys, such as cold storage, can benefit from Hermit's unique features. Hermit is compatible with multi-sig and offers the ability to create adversarial signing ceremonies, where a designated number of people are required to sign for a transaction. This adds a layer of security and reduces the risk of data exfiltration. With slip 39, a complex standard embedded into Hermit, users can establish different levels of trust among key holders within the organization.
Inheritance Planning and International Considerations
Unchained Capital, a US-based financial institution, provides services that involve KYC/AML compliance. While this may raise concerns about privacy and anonymity, it is important to note that anonymity and privacy are different concepts. Unchained Capital carries out KYC to meet regulatory requirements, but they prioritize preserving customer privacy. Inheritance planning is another area where identity becomes crucial. Unchained Capital offers expertise and partnerships to help customers navigate the legal aspects of estate planning for Bitcoin. For international listeners, Unchained Capital primarily focuses on the US market and operates under US regulations. However, they do collaborate with international customers for vault services and are exploring ways to extend their offerings to international inheritance planning.
Dhruv Bansal, Co-Founder and CSO of Unchained Capital rejoins me in this episode to talk about some bitcoin open source contributions Unchained Capital are making, as well as Unchained Capital products and services. Learn more about multi signature, Shamir’s secret sharing, and how Unchained are applying Bitcoin to financial services.
