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Submitted via IRC for Bytram
Fidelity just made it easier for hedge funds and other pros to invest in cryptocurrencies
Fidelity has a long history of dealing with enterprise security, as well as public and private key cryptography to make sure it isn't part of that statistic. Its custody solution will include vaulted "cold storage," which involves taking the cryptocurrency offline, and multilevel physical and cyber controls, among other security protocols that have been created leveraging Fidelity's security principles from other parts of the business.
"You might look at the crypto world and say, 'Wow, is this a new thing?' but we've been managing key materials for a long time," Jessop said. "We took our learnings in how to run enterprise security, then through our exploration of bitcoin and some of the people we've hired, quickly developed some of the crypto native expertise and federated the two of those things."
(Score: 2) by richtopia on Monday November 05 2018, @04:39PM (1 child)
Fidelity is a large stable institution. A large issue with investing in bitcoin is how to enter: multiple large exchanges have gotten hacked, and turning usd into btc requires interacting with some sort of exchange. Fidelity removing the need to deal with an exchange to buy btc, and allowing investment in btc without directly holding btc is worth Fidelity's fees.
(Score: 2) by All Your Lawn Are Belong To Us on Monday November 05 2018, @07:55PM
I understand what you're saying and why some institutional investors may want to have that kind of backing and security, as they do with their regular investments. Fidelity is marketing itself as the first old-world institution to offer the service.
But I also know that cryptocurrency (and I don't know that they'll just limit themselves to btc) was developed specifically so that you wouldn't have to rely on those measures. It may not be anti-institution but there's nothing inherently pro-institution about them. Yes, one does interact with an exchange that might crash, but the secret is not letting your btc ride at the exchange but rather to shift them to offline and unhackable wallets. Once that is done (and enough blocks proof the transaction) the only way you can hack a paper wallet is to physically get the key. (And then what if you've taken other measures to safeguard it? I can think of several.) At any rate, then reverse the process when you want to divest some cryptocurrency. The devil will be in the details, but I wonder how Fidelity will produce that more cheaply and efficiently than an intelligent manager can do it themselves. (And yes, I know they might not and an institution might accept additional fees for the security of not holding the transaction themselves).
It seems to me it is being marketed to those whom are most susceptible to the Bingo. It's not uninteresting and you do have a point. It just seems to me to be contrary to the nature of cryptocurrency. ("Just seems" being the keyword.)
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