“`html
Onramp, a Bitcoin-exclusive financial services provider, has recently introduced an institutional-level asset management solution, constructed atop their multisignature, multi-entity, multi-region custody framework. Onramp functions, for all practical purposes, as a 21st-century, full-reserve Bitcoin bank, capitalizing on Bitcoin’s distinctive and revolutionary technology, in collaboration with institutional custodians such as BitGo, CoinCover, and Tetra Trust.
Established in Texas in 2022 by Michael Tanguma, a former executive at Google and Unchained Capital, Onramp aims to make institutional-grade custody accessible, providing a complete spectrum of financial services to Bitcoin enthusiasts of all sizes; Onramp presents IRAs, trusts, bitcoin-secured loans, estate planning, tax-advantaged accounts, and more.
Onramp operates worldwide (excluding nations penalized by the U.S., like Venezuela and Iran), offering its services not only to institutions but also to Bitcoin OGs and investors having over 10% of their portfolios in the novel asset. Currently, Onramp is a “profitable enterprise that manages billions of dollars in assets under custody,” with a streamlined team of over 25 individuals, according to Tanguma, who discussed this with Bitcoin Magazine.
A Bitcoin Bank in Cypherspace
Seeking to fully exploit the transformative change in financial security that Bitcoin facilitates, Onramp utilizes Bitcoin’s smart contract capabilities, one being known as multisignature script (or multisig for brevity). These constitute a high-security, uncomplicated set of programming instruments intrinsic to the Bitcoin protocol that have extensive applications and use cases — from payment systems like the Lightning Network, to wealth safeguarding greater than any solitary bank can offer.
Historically, there have only been two essential types of wealth custody: Individuals either concealed their gold in their property, the modern equivalent of hiding cash under a mattress, or they sought a trustworthy bank with the most enticing trust-me-bro proposition, expecting them to manage that wealth instead (in exchange for an IOU note or a title of ownership over the assets). This latter method of custody is how fiat currency originated. Each custody type has its advantages and hazards—one is exposed to petty crime and home invasion theft, the other to financial scams and invading forces. Users must choose one over the other, or partition their wealth to diversify their risks. The advent of Bitcoin shattered this conventional approach.
As a distributed or decentralized network, Bitcoin essentially exists universally, with over 80,000 identifiable copies of itself worldwide, communicating about current transactions in a manner that avoids bottlenecks and choke points by design. To ensure the worth of its transactions, the network harnesses the most potent computing network in history, referred to as proof-of-work or Bitcoin mining. What many individuals are unaware of is that Bitcoin transactions can be programmed. Users can effectively devise transactions resembling if-else statements —they are only valid if particular conditions are satisfied. The most prevalent applications of this Bitcoin scripting language are in multisig transactions, meaning that multiple independent signatures must be valid for the transaction to be acknowledged and executed by the Bitcoin network.
Multisig accounts resemble shared accounts at traditional banks, except instead of being safeguarded by attorneys and accountants, they are secured by mathematics and cryptography atop a global, decentralized network. The outcome is something novel: a monetary account that can withstand the caprices of specific political territories, wars, or even natural catastrophes, distributing those keys among custodians across the globe. The balances of these accounts can also be publicly audited by running a full version of Bitcoin on a home computer or by utilizing a Bitcoin explorer — something unfathomable in the conventional finance realm. To quote ex-President Obama, this is significantly superior to having a “Swiss bank account in your pocket.”
Onramp’s Multi-institutional Custody
Until now, the majority of Bitcoin users ironically remain trapped in the pre-Bitcoin paradigm of custody, either retaining all their coins on advanced trust-me-bro exchanges like Coinbase while holding a substantial portion of the bitcoin represented by various ETFs and bitcoin treasury firms in the United States, or by placing all their coins into a hardware wallet that they manage. More sophisticated users utilize multisig protocols for “cold storage,” high-security wallets for personal use that geographically distribute the keys while keeping them under the user’s control. Onramp operates similarly, but at the institutional scale.
By employing three independent custodians across distinct countries — BitGo in the U.S., Tetra in Canada, and CoinCover in the UK — Onramp can provide financial security that mitigates risk from any single nation, jurisdiction, team, or hardware apparatus. This presents an alternative to the highly concentrated custody options otherwise available.
“Half of Bitcoin’s $2 trillion market capitalization resides on hardware wallets,” Tanguma informed Bitcoin Magazine, adding that aside from Ledger’s extensive presence in the self-custody market, “Trezor holds about 7%, with Coldcards and other hardware devices, the remainder on Coinbase. If we’re generalizing, Fidelity and other institutions possess some, but Coinbase and Ledger retain the vast majority of Bitcoin. If we consider 15 years into the future, with Bitcoin priced at $1 million to $10 million, $1 million places it at a $20 trillion market cap, $10 million at a $200 trillion market cap. There’s no way this will scale with individuals placing it on Ledgers.”
Tanguma’s skepticism regarding the future of Bitcoin custody reveals a significant amount of work required to enhance the financial security of the globe, and he encourages Bitcoiners to be more inventive in how to deliver the commitments of Bitcoin to the next $200 trillion of wealth.
Source link
“`