Veriphi’s Solutions Have Secured Millions Worth of Bitcoin
By Maciej Cepnik about 2 years
The creation of Veriphi took place on January 3, 2019, during the 10th anniversary of Bitcoin. At the beginning of the business, Veriphi members were immersed in the technical elements of Bitcoin and were diving into the various aspects of security that are needed to preserve bitcoins to prevent loss, theft or sabotage of private keys.
Bitcoin is a concept with multiple facets, from which economic concepts can be understood by most investors who are looking for an alternative asset that is not correlated with other traditional financial instruments. However, these investors do not necessarily have the technical skills to use their bitcoins the right way.
Bitcoin’s importance in the financial and economic ecosystems has continuously risen since its inception in 2008. Its position in the world has only solidified and over the past few years, it has demonstrated that it is here to stay. Thus, investors must be conscious of the risks in manipulating and conserving it. Ultimately, Bitcoin is regular computer text, represented in the form of 0s and 1s, so the question remains: how do we make sure this valuable data is secured properly and in a way that doesn’t hinder the user’s sovereignty over it.
One aspect that gives Bitcoin value is its resistance to censorship. The user has ultimate power over his bitcoins as well as his transactions. The majority of users are not profiting from this aspect because they are using exchange platforms or mobile wallets that are connected to third party Bitcoin nodes. This is a really bad practice that facilitates blockchain analysis by surveillance companies and reduces user privacy. This also opens the door for hackers to do targeted digital attacks or even scarier, physically remove bitcoins from you.
Having one’s own node is a primordial need to be an independent and sovereign peer in the Bitcoin ecosystem. To explore these aspects further, we invite you to read this previous article by Veriphi.
Owning your own node is the first step to secure your bitcoins the right way. Additional steps are recommended to make your operational security an impenetrable fortress.
The rest of this article explains how Veriphi forged a security plan for a private investor seeking complete sovereignty and unparalleled security for around 200 bitcoins, equivalent to about $2.5 million CAD at the time of writing.
Multiple signature scheme
A very interesting feature of Bitcoin is the ability to create a multiple signature contract. there’s only one vault, all keys must be in the same exact location to open it, the multi-signature contract allows you to control access to your bitcoins more securely by dividing access. This feature is very flexible for the user as well. They have the choice of the number of signatures created ‘m’ and the number of signatures required to access it ’n’. The entire scheme is created offline so as to qualify as Cold Storage using the Coldcard hardware wallet, considered the safest in the market. Depending on the user’s needs, they can opt for a 2-of-3 or a 3-of-5 signature scheme. The various signatures must be spread out geographically since the goal is to avoid having a single point of failure. For example, the user can decide to have a key at home, one at their cottage and another in a safe deposit in a bank. The options can vary depending on personal preferences. In the case mentioned above, Veriphi’s client opted for a 2-of-3, with each key situated on a different continent, making physical theft of their bitcoins virtually impossible.
To improve user privacy, there exists a solution using open-source software to obfuscate their bitcoins securely and in a trustless manner. This is a good way to break the links of dependence between the different UTXO’s of the user. On the other hand, it is a rather tedious task for large amounts considering that the software used, Wasabi Wallet, only allows mixing about one bitcoin at a time. However, this method is constantly improving and heading towards further optimization and automation. These software implementations are of great interest to Veriphi, so we are always monitoring their progress.
Electrum Personal Server
Never again will you have to check your addresses and transactions on a website such as blockchain.info. This may seem trivial at first glance, but by asking for your transactions on a third party site, valuable information about your bitcoins and transaction habits are recorded. In addition to being subject to advanced analysis, this data is susceptible to be hacked by malicious actors who will benefit from it by targeting you more easily.
The solution is simple, using Electrum Personal Server, an open-source software that has proven to be extremely safe and trustworthy, you take a proper step towards becoming a sovereign individual in the world of Bitcoin. By connecting Electrum Personal Server to your own node, you make sure you never share data unnecessarily with a third party. Veriphi’s investor services include installing and linking the software to your own node. They can proceed to “stacking sats” with peace of mind and without fear of being spied on.
Any security plan worthy of its name must be linked with an inheritance plan in case of disability or the death of the bitcoin owner. This may be a difficult topic for most people, but it is crucial to think about it in order to complete the safety loop. It was unthinkable for Veriphi’s client that these bitcoins would fall into oblivion and that their family and loved ones cannot securely recover their assets.
Due to the complexity of the operation and the need for a minimum of technical knowledge, it is necessary that the plan is simple enough to be executed without a problem, all the while not compromising the security of the bitcoins during the lifetime of its owner. For example, the executor of the will must not be able to steal the bitcoins with the information that is included in it. Balancing the simplicity of access and the amount of information disclosed is very personal to the investor. Veriphi made sure that the client understood the implications of each one of their decisions in this regard.
We are also registered as an “Official Technical Consultant” in the event that the client’s family needs assistance in recovering bitcoins. We accept this role with great humility and respect and responsibility.
Ultimately, the path to maximum security in Bitcoin can be done in a gradual and thoughtful way. Veriphi is proud to have implemented all of these solutions and other components not mentioned in this article for the company’s first big mandate. Knowing that our know-how and expertise contributed to the security and confidentiality of around 200 bitcoins, we are confident in taking on other major challenges.
This particular mandate was important to us because it is a validates capabilities and increases the confidence others have in us. Many other previous mandates were also very revealing for the company, but did not contain the thrill of handling such a large sum.
All of the consultation and the products used were done with total transparency and clarity on the side of the customer.
Integrity is a fundamental value for us. Veriphi ensures that the customer gets a fully comprehensive understanding of their operational security and we make sure to stay on top of the latest developments in software and hardware developments related to Bitcoin.
What are you waiting for?
Do you still hesitate to maintain your own Bitcoin node or implement a multiple signature scheme? You shouldn’t wait to have an astronomical sum before protecting it. Your bitcoins are valuable assets that deserve their own fortress. Our services are for anyone who wants to improve their security and their use of Bitcoin in general. No sum is too little to protect. If you believe, like we do, that Bitcoin is one of the most valuable assets out there, precautions must be taken to secure it.
Consider these solutions as a seatbelt in a car. It’s better to be buckled in and not need it than to need one and not have taken the time to be safe. Veriphi is that helpful voice that reminds you that it’s always better to be safe than sorry.
Where to start?
You want to quickly test your security setup? Take this free test created by Veriphi. We will be pleased to give you an overview about your operational security and respond further you might have.
Follow us on:
Thank you !