Winklevoss Capital backs a crypto custody startup that lets users protect private keys via friends
October 31, 2019, 4:05AM EDT
1 min read
Cryptocurrency custody startup Vault12 is offering a new way to protect private keys - by using friends and family as a recovery network.
The solution, dubbed as the “personal cryptocurrency security solution,” uses a cryptographic technique called Hierarchical Threshold Shamir's Secret Sharing to let “guardians” safeguard users’ private keys.
The technique, developed by Israeli cryptographer Adi Shamir, allows guardians to possess parts of users’ seed phrases, and if users lose access to their cryptocurrency holdings, they can combine portions of their guardians’ keys to recover their funds. Users can pay guardians in ether (ETH) to protect their key portions, said Vault12.
"Today's world relies heavily on our social circle in both our personal lives and our professional lives. That's why we're taking a more social approach to cryptography and entrusting our loved ones to guard our assets," said Blake Commagere, co-founder and COO of Vault12.
The idea has seen backing from notable investors, including Winklevoss Capital, True Ventures and Naval Ravikant, founder of AngelList. Vault12 did not disclose the amount of funding raised via these investors.
"Safeguarding money is necessary for the crypto economy to flourish. Vault12's distributed, decentralized, and server-less approach to security helps reduce friction associated with securing crypto assets,” said Cameron Winklevoss, partner at Winklevoss Capital.
Vault12's solution is decentralized, meaning the firm does not have access to users’ seed phrases and funds. Comagere said that the firm plans to safeguard “everything from legal documents to house keys and more” in the future.