Founders: Becca Rubenfeld, Rob Hamilton
Date founded: March 2022
The location of the headquarters: Nashville, TN
The number of employees: Five (soon seven)
Website: https://www.anchorwatch.com/
Public or private? You can also contact us by email.
The development of the product has taken almost three years. AnchorWatch has rolled out its product — a collaborative bitcoin multisig vault that comes with an insurance policy.
AnchorWatch, a company that insures bitcoin stored by vaults called Trident Vaults, has developed a system of smart contracts for Bitcoin. These include timelocks, multisig requirements, and spending restrictions. Lloyd’s of London Coverholder.
AnchorWatch’s clients are protected by a combination of world-class insurance and this cutting edge technology. This is a protection level that no Bitcoin companies have offered up to now.
“We identified that insurance in the Bitcoin space was totally lacking,” Becca Rubenfeld, co-founder of AnchorWatch and COO at Bitcoin Magazine. “There are a few risks that technology can’t mitigate — like really sophisticated wrench attacks, a customer dying with their keys or even AnchorWatch being a bad actor — and we were able to plug those holes with the insurance.”
Since the opening of their doors last month, Rubenfeld’s team has received a number of requests and inquiries for this product.
It’s ironic, then, that Rubenfeld found her niche within the Bitcoin industry by helping institutions and individuals secure their bitcoins. This is especially true considering that it was her inability to see bitcoin beyond a mere speculative instrument that brought her together with Rob Hamilton, her AnchorWatch co-founder.
AnchorWatch: The Origins
Rubenfeld Hamilton interacted for the first time in group chats on Clubhouse, a social media application in 2020.
“We met in Clubhouse Bitcoin rooms,” Rubenfeld recounted the story.
“I was just trying to get trading alpha, and there were these guys in the rooms who were like the who’s who of Bitcoin. They ran Bitcoin companies, and they were core devs and cultural personalities. We were all just hanging out during the quarantine,” She added.
“Everybody was starved for human connection, and we became friends. I got orange-pilled this way very quickly.”
Rubenfeld calls this period her “masterclass in Bitcoin,” Hamilton was the first to mention bitcoin insurance.
“Rob was just ideating and realized that he knew how he would build the tech to do that self-custody insurance,” said Rubenfeld.
Hamilton received encouragement from American HODL as well as Jason Williams, who were the two initial investors. Rubenfeld was invited to the capital table shortly after but realized that she could help Hamilton with other things.
“He was very busy building his MVP (minimum viable product), and I was like ‘Okay, Rob, so, just make sure to make a pitch deck, and you need a pro forma, and you need to do some forecasts, and, by the way, do you know much about insurance?'” Rubenfeld – a brief explanation
Rubenfeld soon began to perform these and other tasks for Hamilton, while Hamilton concentrated on programming. In order to do so, Rubenfeld used her skills from working at companies such as Starbucks, Target, American Eagle and Target.
She came to Hamilton as a voluntary, but, after working two 24-hour shifts in her first week, realized that she had found something she was passionate about.
“We were working very closely together, talking all day about the vision,” Rubenfeld was recalled.
“It was so intense and so much fun, and it was just kind of a change I was looking for compared to the work I’d been doing. So, after a little over a week, I told him, if we wanted to do this together, I would leave Starbucks and join full time. He was in, and so I joined as co-founder and COO a few days later,” She added.
From that moment, Rubenfeld and Hamilton worked relentlessly — for almost three years.
“We were in this office heads down 12 plus hours a day every single day,” said Rubenfeld. “Luckily, our investors remained patient as we went from zero to one.”
AnchorWatch Product
AnchorWatch’s multisignature setup allows its users to protect and manage their bitcoins. AnchorWatch holds the majority of keys for this unique system.
Rubenfeld breaks down the product in more detail.
“At the highest level, we are distributing custody of Bitcoin amongst multiple keys over time,” She explained.
“With the timelocks, it allows you to have a standard way to manage your Bitcoin where the customer holds keys and AnchorWatch holds keys, but we’re both required signers, which makes it a unique form of collaborative custody,” She added. “But then over time, additional ways to spend the Bitcoin become available, which enables disaster management and inheritance procedure assurances.”
This timelock, or Bitcoin-based technology is a way to lock down the Bitcoin blockchain. miniscriptThe client can access bitcoins using different keys at any time. This is helpful if the keys have been lost, destroyed, or stolen, or if they are no longer available due to death, or a change in employee.
AnchorWatch only needs to sign transactions as long as the insurance customer is still with the company. AnchorWatch is able to return any bitcoins that were paid to an agreed-upon bitcoin address in the event the customer decides to cancel their policy.
AnchorWatch cannot control bitcoins in a unilateral manner. If AnchorWatch disappears, then the vault will be controlled solely by customer keys once the insurance policy expires. Building with miniscript, and then embedding insurance into it, gives customers the flexibility of being protected against multiple perils.
These policies cover Bitcoins worth up to $100,000,000. They start with a 0.55% annual percentage of their value.
“What’s unique about the product is that while you have an insurance policy and we, via Lloyd’s of London, have financial liability, we have a key and we’re a required signer,” Rubenfeld – a brief explanation
“So, either we can sign in combination with the customer or, in the case of a customer death or a sophisticated wrench attack, then we could eventually sign in combination with a recovery institution,” She added.
“But when your insurance policy ends if you don’t choose to renew with us, the vault can be controlled by the customer’s keys alone, as programmed into the bitcoin timelocks — all this is programmed at the protocol level, so it’s verifiable on chain.”
Initial clients
After the launch in December, potential customers began to contact us.
“The early response has been very, very strong,” said Rubenfeld. “Something like 180 people have reached out to inquire.”
Rubenfeld said that initially, interest was coming from a mixture of retail and business customers in the U.S. but that it leans more toward retail clients. Others insure their whole bitcoin portfolio, while some segment their bitcoin among multiple methods of custody and insure a small portion.
“The typical retail customer is securing 5-15 bitcoin,” Rubenfeld, shared by all. “80% of those who have signed up for the service are protecting between $300,000 and $3 million worth of bitcoin, and we’re in the process of working through underwriting on several large customers with much larger policies.”
Rubenfeld assures me that AnchorWatch can handle large accounts. She is also excited to bring AnchorWatch’s product to the market as corporate Bitcoin strategies become more common.
AnchorWatch is a new company, and she anticipates getting calls.
“They’ll watch from afar for a little bit just to confirm that they’re comfortable about how things are going before they make a move,” said Rubenfeld.
“But we’ve had some large commercial clients reach out, and in some cases, they’ve got thousands of bitcoin, and they might be starting with a $10 million policy. So, they’re just insuring a little bit, as they make sure that they’re happy as customers. We enjoy this process and we feel confident as we serve them,” She added.
“They’ve stated that if they’re happy next year, they would move more bitcoin over to Trident to be covered.”
Ultimate Protection
Rubenfeld is convinced that AnchorWatch will be a valuable service to both retail clients and corporate clients, as they can protect not just their bitcoin but also themselves.
“We’re an insurance company, but we’re actually protecting people,” Rubenfeld – a brief explanation
“By the nature of both the technology and the insurance, which protects against wrench attacks, we are actually keeping people safe. Being an AnchorWatch customer disincentives wrench attacks, because, one, it’s incredibly hard to pull off a wrench attack with the way the vault is constructed, and, two, even if the attacker does pull off an attack the stolen bitcoin becomes the insurer’s property,” She added.
“We have the resources of Lloyd’s of London behind us and we’re an insurance company:, we’re going to be here for a hundred years, so we’re going to hunt you forever.”
Rubenfeld continued to elaborate on how the attackers didn’t just have to pull off the successful heist. They also had to never make an error in the way they managed the bitcoins stolen until their death (which can be difficult, considering Bitcoin is public ledger).
Rubenfeld is convinced that the trend will be for clients to openly disclose they are AnchorWatch subscribers (something AnchorWatch wouldn’t do in their name without permission), as a way to deter thieves from trying to steal anything from them.
“I think what will happen is people will want to say, ‘Hey, I’m an AnchorWatch customer — don’t even try it,'” Rubenfeld said proudly.
“And so we take our work very seriously — we feel like we are protecting people, which is our mission.”
“This article is not financial advice.”
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Source: bitcoinmagazine.com
