$130 billion – that’s the value of bitcoin currently lost or stranded in locked-off digital wallets.
Of the existing 18.7 million bitcoin, a staggering 20% is no longer accessible by the owners who have lost their keys. We have all seen the anxiety inducing headlines of hard drives containing millions worth of bitcoin being accidently thrown away or users being left with two more attempts of unlocking their digital wallets before their fortunes are locked away forever.
In other aspects of our finances, we know our funds are safe – we are protected if the bank goes bust, in the case of fraud or theft. But unlike our bank accounts and wallets, we don’t have a password or pin reset with our crypto – we, as the users are our own gatekeepers. Part of crypto’s appeal is the idea of self-government but the current ways to manage our digital assets are too painful.
Crypto owners’ private keys which they need in order to spend or move their funds, are stored in wallets, usually protected with a seed phrase. Those seed phrases are the only way to prove those crypto assets belong to you but with sequences ranging from 12-24 words, they are notoriously difficult to manage. Even extra measures of security through hard drives are not foolproof. The security system is vulnerable to human error which is a key concern to existing investors and a huge barrier to new investors. This is where Coincover comes in. With Coincover stories of locked away fortunes can be a thing of the distant past. Coincover wants to protect us from ourselves and bad actors, and in doing so make crypto accessible to everyone.
Founded in 2018, Coincover is on a mission to ensure that you and I can safely and securely invest in digital assets. Over the last year, crypto has shifted away from the fringes and into the mainstream but in order to increase usage of crypto, it needs to be more user friendly. The Coincover team, bringing in years of experience spanning across government, military, and cyber security, have created a suite of products with the goal of making crypto accessible to all. They provide secure backup and recovery of private keys with Government-standard security protocols and an insurance-backed guarantee underwritten by Lloyd’s of London in the event of theft, fraud, user error and business failure. Their Deposit Protection Guarantee protects customer wallets up to the value of $1 million in case of business failure or a catastrophic systems failure. Users accounts are also monitored to keep an eye out for any threats. The company also addresses estate planning by offering cryptocurrency wills to ensure transfer of digital assets to loved ones.
Coincover’s traction and market potential
We came across Coincover early this year and were impressed by the rapid progress the team had made, having only launched 6 months earlier. It was clear that the market was eagerly waiting for a solution such as Coincover. Having launched only in the summer last year, they are already protecting users across 84 partners including the likes of BitGo, Curv and Fireblocks. Coincover is now the default protection for many of their partners and when given a choice, 9 out of 10 users choose to protect their crypto through Coincover. But this isn’t a solution only in demand by the new wave of investors. Research by Aon and Swiss Re have found that existing investors too would feel more secure if their wallets had insurance coverage. With 191 million crypto accounts globally, Coincover have only just scratched the surface of a huge market which is hungry for its product. And with Coincover now enabling more people to invest in digital assets, we cannot wait to see the role it plays in growing a bigger, more active user base.
Coincover – missing piece of the crypto puzzle
Coincover was described by one of its partners as the ‘the obvious missing piece of the entire crypto infrastructure’ – and we couldn’t agree more. As we learn more about the team and its solution, we are excited about the pivotal role Coincover is beginning to play in the crypto ecosystem. Coincover doesn’t only address consumer needs but also serves a real burning demand for its partners. As interest in crypto from retail investors continue to increase, regulators are paying close attention as to how companies in the space are protecting their customers. Customer protection is paramount for the regulators as it is for Coincover making it the ideal partner for crypto companies. By partnering with Coincover, the likes of Bitso, Civic, FalconX and Vesto, are able to better engage with their customers and address their concerns of loss or stolen funds head on. Coincover’s technical solution has also opened up a new market for insurers. Crypto’s rise has caught the eye of insurers as the next potential big opportunity, but it has been difficult to write this risk despite high demand for insurance to protect digital assets. The strength of Coincover’s security solution alongside its experienced founders were key in the establishment of the first and only insurance backed worldwide guarantee in partnership with Lloyd’s of London.
The more we learn about Coincover, the more we understand its value not just to users but to crypto companies and financial services more broadly. We are excited to be joining Coincover on their mission to make crypto accessible for all. The Coincover team have already made great progress since we first met the and we can’t wait to see every crypto company brandishing proudly their “Protected by Coincover” mark.
