Cameron and Tyler Winklevoss have won their latest blockchain-related patent in a long line of successful applications according to information published on the US Patent Office website on Tuesday, September 4, 2018. The billionaire twins’ company, Winklevoss IP LLC has now won a total of nine patents in 2018 alone.
The new patent, labeled 10,068,228 lays out a plan for cold storage of digital assets by building a computer network made up of isolated computers used to host secure storage wallets for cryptocurrencies and cryptocurrency exchange-traded products (ETPs).
Secure Storage Framework
According to the patent document, the computers in the proposed network will be physically separated from each other and only connected to the blockchain when carrying out transactions or moving assets. As a result, they will effectively function as cold storage devices permitting user access only with the use of special cryptographic keys.
Every new storage account on this computer network will be given a cryptographic key that will be divided into several parts with each fragment saved onto an external storage device such as a USB drive, or physically engraved onto paper, plastic, papyrus or laminated cards.
An excerpt from the patent document abstract reads:
“A respective reference identifier may be associated with each digital asset account. At least one of the one or more private keys corresponding to each digital asset account may be divided into a plurality of private key segments and written to a card along with the respective reference identifier to create sets of collated cards, wherein each set comprises cards corresponding to different private keys.”
According to the document, when producing the cryptographic keys, they may be stored on both physical and electronic storage mediums, but at least one set of keys must be stored on an electronic storage device such as a USB drive. The document further states that if the keys cannot be created onsite at the storage location, they must be delivered to the storage location in person or via fax. Before gaining access using the keys, owners must also show three separate forms of identification to be granted access.
The application reads in part:
“In embodiments, private keys for a multi-signature account may be distributed to a plurality of users who are required to authorize a transaction together. In embodiments, private keys for a multi-signature account may be stored as backups, e.g., in secure storage, which may be difficult to access, and may be used in the event that more readily obtainable keys are lost.”
It will be recalled that several industry figures have previously highlighted the importance of a reliable custody solution. In July 2018, prominent crypto investor Mike Novogratz declared that a custody service offering from a “trusted source” will likely result in a price recovery of crypto assets across the board.
Speaking to Ran Neu-Ner on CNBC’s ‘Cryptotrader,’ Novogratz remarked:
“I think the next move up is going to need custody from a trusting source. […] If I’m at the state of Wisconsin, I’m not going to risk my job on a company called BitGo.”
Since that time, investment banking giant Goldman Sachs has announced that it is weighing up bringing its own crypto custody service offering to the market.
Earlier in the year, the so-called ‘bitcoin billionaire’ twins successfully obtained a patent for settling exchange-traded products (ETPs) with cryptocurrencies including bitcoin, dogecoin, ethereum, and ripple. Regardless of the SEC’s repeated refusal of their proposed bitcoin exchange-traded fund (ETF), they appear to remain still focused on creating solutions to aid the operation of a crypto ETF pending when the SEC approves.
In April, they also won a patent aimed at improving security in cryptocurrency transactions using a number of common cryptographic techniques.