VersaBank, a small-scale Canadian chartered bank which operates using an electronic branchless model, is building a blockchain-based safety deposit box for cryptocurrencies and other digital assets.
Formerly known as Pacific & Western Bank of Canada, VersaBank plans to roll out what it claims to be “the world’s first blockchain-based safety deposit box”, VersaVault, by June. The service will be available globally.
“We’re using what banks are all about — safety and security — only what we’re doing now is saying that a physical box in the basement is getting obsolete. Most people’s really valuable assets are contained in some sort of digital format, whether it be a deed or a contract or a cryptocurrency,” VersaBank CEO David Taylor told Bloomberg.
“Bitcoin and other cryptocurrencies are quickly gaining popularity and holders have already experienced their valuable holdings vanish from the less secure ‘digital storage’ options. It is our aim to make VersaVault the safest place to secure your digital valuables, with absolute privacy,” Taylor added.
Former Principal Architect of Cyber Security at Blackberry, Gurpreet Sahota, was recruited to lead a team of software engineers specialized in cyber security in designing the VersaVault.
Traditionally, safety deposit boxes are physical containers held within bank vaults and used to store physical goods, such as gemstones, gold bars, important documents, or paper wallets. The VersaVault safety deposit boxes will store digital assets on the blockchain. Just like with traditional safety deposit boxes, the bank won’t know what’s inside. Unlike traditional safety deposit boxes, the bank won’t be able to access the contents of a VersaVault deposit.
“Our differentiator in this market is to be secure and super private,” Taylor said. “The bank wouldn’t have any kind of back door to open up the vault, we’re just providing the facility that folks could put their digital keys in.”
With a market cap of less than USD $150 million, 80 employees and roughly USD $1.38 billion in assets, VersaBank has been flying under the radar, all while posting strong metrics. Per Bloomberg, VersaBank has outperformed Canada’s big banks, with shares soaring 24 percent this year versus the 2.9 percent decline of the eight-company S&P/TSX Commercial Banks Index.
Last year, South Korea’s Shinhan Bank announced it was working on a somewhat similar project, planning to launch a bitcoin vault and wallet platform by mid-2018.
Various non-banking companies, such as Xapo and Goldmoney, are offering ‘vault’ storage services for cryptocurrencies and other digital assets.
Versabank safety deposit box cryptocurrencies – Image source: CNW Group/TMX Group Limited
What is the point of this? The whole reason behind crypto is so that we never have to go through a bank again. This is just asking for trouble.
I am utterly freaking lost here.
What value does a block chain add in this scenario, other than buzzword value? How is it in ANY WAY better than just putting the information in a random database?
The user can always verify that the “digital asset” is being properly stored by just querying the freaking database. And if you want to decentralize it, you can use any of the many swarm technologies out there. You might want to use a block chain to record financial transactions that pay for swarm storage, or maybe to store swarm reputation information, but putting the actual “base” data on a chain gains you NOTHING and is STUPID.
The ONLY value of a block chain is as a notary so that somebody can’t rewrite history, and specifically so that somebody can’t reorder events or deny that some piece of information existed before some particular time. If that’s not part of what you’re trying to do, then a block chain is a straight up waste of resources that gives you nothing.
About 95 percent of the projects that crawl out of the woodwork seem to be based on completely misunderstanding what the technology does and does not do.