Ben Davenport is leaving his team member & software engineer role with Facebook to go and work for Bitgo. Who is Davenport? He is a former Google employee. After a change of heart Davenport started working at Facebook after its acquisition of startup Beluga, a company he co-founded. He has an AngelList syndicate where he and other accredited investors have been funding Bitcoin startups. In short a standup guy who believes in Bitcoin and what it stands for.
Now what is Bitgo? Bitgo is a company that helps users and organizations better secure their Bitcoin funds. Or to quote Mr. Davenport: ”The way I think about Bitgo is it’s a pioneering leader in security for Bitcoin. BitGo was also one of the first companies to release a multi-signature (or ‘multisig’) Bitcoin wallet. This multisig wallet is a far more secure way of storing Bitcoins.
· Traditional wallet VS Bitgo’s Multi wallet.
Most virtual traditional wallets in use today rely on one public and one private key. The private key is all that is required to release funds. Loss of that key means the funds will no longer be accessible, and theft of the key may result in the funds being stolen.
The one that Bitgo provides to their customers utilizes several private keys, the aptly named multi-signatures. The added security of multisig is in the fact that more than one of which (for example, two of three) must be signed before funds will be sent. Redundancy is also provided, in case one of the keys is lost or compromised, the funds can still be controlled, providing the other keys weren’t compromised.
For its consumer wallet BitGo currently uses three keys: one for the user, one for BitGo and one stored in offline backup. At least two of the three keys are needed to access the wallet. Since two keys must be signed to access the wallet, there can be no single source of intrusion, meaning a hacker would somehow need to obtain more than one key to gain control of the funds.
· Interesting for national and international companies that want to provide Bitcoin as another payment method.
Bitgo can be very interesting to use within national and international companies. Larger organizations are by nature complex systems. Every company has different levels of management from the CEO downward, and then there is the accounting department that is tasked with moving money around for projects and updating hard/software, etc.
“That’s where BitGo sees an opportunity; providing organizations with the ability to better control the Bitcoin process and procedure in the form of multiple private key signatures. This will offer enhanced security for enterprises” Mr. Davenport said to us.
· Multisig the way of the future?
There is a recent rise in demand and development of these multi-signature wallets. BitPay has been working on a multi-signature wallet solution. Cryptocorp, started by Tradehill co-founder Ryan Singer, is also working on multisig for Bitcoin companies. Because there is a recent spike in account/wallet hacking by scammers and frauds alike, the community and companies alike are creating a new more versatile and stronger wallet. For now this will suffice to hold the hacking demon dogs at bay.