Founders: Becca Rubenfeld and Rob Hamilton
Date Founded: March 2022
Location of Headquarters: Nashville, TN
Number of Employees: Five (soon to be seven)
Website: https://www.anchorwatch.com/
Public or Private? Private
After almost three years of development, AnchorWatch has rolled out its product — a collaborative bitcoin multisig vault that comes with an insurance policy.
The company has created what it calls a Trident Vault, which utilizes smart contracts on Bitcoin to enable features like timelocks, multisig quorums and spending conditions, and AnchorWatch insures the bitcoin protected by these vaults as a Lloyd’s of London Coverholder.
The combination of this technology plus world-class level of insurance helps protect AnchorWatch clients from risks related to theft, kidnappings, fraud or catastrophic events. It’s a level of protection that no Bitcoin company has offered to date.
“We identified that insurance in the Bitcoin space was totally lacking,” AnchorWatch co-founder and COO Becca Rubenfeld told 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.”
The market has been primed for a product like this, as Rubenfeld and her team have been fielding a host of inquiries and requests for its product since the company opened its doors for business last month.
And it’s ironic that Rubenfeld has found her niche in the Bitcoin industry in helping people and institutions secure and insure their bitcoin stacks, especially considering it was the fact that she didn’t see bitcoin as much more than a speculative tool that led to her meeting her co-founder at AnchorWatch, Rob Hamilton.
The Origins Of AnchorWatch
Rubenfeld and Hamilton first interacted in group chat rooms on the social media app Clubhouse in late 2020.
“We met in Clubhouse Bitcoin rooms,” recounted Rubenfeld.
“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.”
During this time, which Rubenfeld fondly refers to as her “masterclass in Bitcoin,” she first heard Hamilton discussing the need for 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.
The likes of American HODL and Jason Williams urged Hamilton to build the product and were two of its first investors. Rubenfeld joined the cap table soon after, but quickly noticed that she had the capability to help Hamilton in other ways.
“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?’” explained Rubenfeld.
Before long Rubenfeld began to complete these tasks and many others for Hamilton while he focused on coding. In doing so, she harnessed the skills that she’d gained during her years working in corporate for companies like Starbucks, Target and American Eagle.
At first, she came on as a volunteer, but after pulling two all-nighters during her first week helping Hamilton, she realized she’d found a calling.
“We were working very closely together, talking all day about the vision,” recalled Rubenfeld.
“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.”
The AnchorWatch Product
As mentioned, AnchorWatch’s product enables its customers to manage and protect their bitcoin through a unique multisig setup for which AnchorWatch themselves holds some of the keys, while insuring said bitcoin with the backing of LLoyd’s of London, one of the largest and most reputable insurance companies in the world.
Rubenfeld broke the product down in greater 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.”
In other words, this timelock technology, which utilizes Bitcoin’s miniscript, allows for clients to access their bitcoin using different combinations of keys over time, which is useful if keys are lost, stolen or destroyed or become unavailable because of death or employee changes at company.
And AnchorWatch is only required to sign the transaction so long as the customer continues its insurance policy with the company. If the customer chooses to cancel the policy, AnchorWatch can return the bitcoin to the originally agreed upon bitcoin address.
AnchorWatch itself can never unilaterally control a customer’s bitcoin, and if AnchorWatch were to disappear, the vault can eventually be controlled by the customer’s keys alone once the policy ends. The flexibility to protect customers against many perils at the same time is the advantage of building with miniscript and embedding it with insurance.
The insurance policies, which start at 0.55% of the value of a clients’ bitcoin holdings annually, cover amounts of bitcoin ranging from $250,000 to $100 million.
“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,” explained Rubenfeld.
“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 launching in late December, the floodgates opened and potential clients began getting in touch.
“The early response has been very, very strong,” said Rubenfeld. “Something like 180 people have reached out to inquire.”
Rubenfeld also noted that the initial interest is coming from a mix of U.S.-based retail and commercial customers, though it skews heavier toward retail customers. Some are insuring their entire bitcoin holdings, while others are segmenting their bitcoin between multiple custody methods and are insuring a portion.
“The typical retail customer is securing 5-15 bitcoin,” shared Rubenfeld. “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 assured me that AnchorWatch is prepared to handle larger accounts, and that she’s excited to be bringing AnchorWatch’s product to market at a time when corporate bitcoin strategies are becoming more popular.
She expects to be getting calls from such clients as AnchorWatch establishes itself.
“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.”
The Ultimate Protection
Rubenfeld believes that both AnchorWatch’s retail and corporate clients alike will find AnchorWatch’s services to be invaluable as it not only protects the clients’ bitcoin, but potentially even the clients themselves.
“We’re an insurance company, but we’re actually protecting people,” explained Rubenfeld.
“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 went on to explain how attackers wouldn’t have to just successfully pull off the heist, but never make a mistake in managing the stolen bitcoin until the day they die (which is tough considering that Bitcoin is a public ledger).
Rubenfeld believes that this will lead to a trend in which clients willfully disclose that they’re an AnchorWatch customer (something AnchorWatch would never do on their behalf without their permission) as a means to dissuade attackers from even trying to steal from them.
“I think what will happen is people will want to say, ‘Hey, I’m an AnchorWatch customer — don’t even try it,’” said Rubenfeld proudly.
“And so we take our work very seriously — we feel like we are protecting people, which is our mission.”
