Elliptic Vault calls its service “deep cold storage” for Bitcoins. The company is so confident that their Bitcoin storage facility is tamper-proof, that they tapped Lloyd’s of London to insure their vault against loss.
One of the big downsides to Bitcoin is if someone gets into your digital wallet, and transfers your Bitcoins to his or her own wallet, the transactions are virtually irreversible. Losing your Bitcoin wallet is actually worse than losing cash. Not surprisingly, there are a number of malware attacks on computers which check the infected device for a Bitcoin wallet and, if it finds one, transfers all the Bitcoins to the hacker’s wallet.
It was that very insecurity that prompted development of the Elliptic vault. “We came up with the idea of offering a Bitcoin vault service, because we realised that security is a major concern for many Bitcoin holders,” Elliptic told Red Tea News in an email statement. “There have been numerous reports of online web wallet services being hacked, or of people accidentally throwing away their private keys. Our aim is to provide a service which takes all of the doubt, fear, and worry out of storing Bitcoins.”
The Elliptic vault service works by storing the Bitcoin private encryption keys on servers in secure locations that are not connected to the Internet. Even with that, convincing Lloyds to insure the vault was not an easy sell. “It was difficult to get a Lloyd’s underwriter on board, and involved a long process of explaining what Bitcoin is exactly what the storage risks are,” the company explained. “They did not understand Bitcoin.”
Elliptic sees the move by Lloyd’s as helping change the perception of Bitcoin and digital currencies with government regulators. “Yes, I think we are already seeing this warming of attitude in some countries. The fact is that it is very difficult to suppress distributed technologies, as we have seen with BitTorrent. And neither is it in government’s interests to ban it — crypto-currencies will herald a new era of financial innovation, which will lead to lower costs and increased choice for consumers.”
Exactly what we’ve been saying all along. Digital currencies are efficient, and that’s the compelling value that will ensure their survival. The next evolution of digital currencies will likely be Bitcoin-like digital currencies that are redeemable for real commodities like silver, gold, and copper. If governments reacted badly to digital currencies, then you can expect them to have a fit over commodity-backed digital currencies, even though the use of a token to represent a physical good is older than the concept of money.
The good news is, if you do have a small fortune in Bitcoin, there’s no point leaving it around the house where it might get stolen. Contact Elliptic Vault, and put your Bitcoins in deep cold storage — and rest easy that your deposit is backed by Lloyd’s of London. In the world of Bitcoin, that’s about as close to a guarantee as you get.