Digital Asset Custody Services (DACS) aims to disrupt the digital assets market with a secured custody platform

From time to time, we invite industry thought leaders to share their opinions and insights on current technology trends to the IT Infrastructure blog. The opinions in these posts are their own, and do not necessarily reflect the views of IBM.

 

A revolution in how consumers and businesses exchange value is underway right now. We are seeing smart contract solutions and cryptocurrencies proliferating across industries. Blockchain technologies are enabling peer-to-peer transactions that increase efficiencies and help establish greater trust between parties.

To participate in this new financial landscape, companies and individuals must be able to store and transfer digital assets securely and quickly. We have observed that the market has grown faster than the development rate of an enterprise-grade underlying infrastructure, which can leave these exchanges and their users susceptible to cyberattacks.

When I established a hedge fund to trade digital assets, I discovered a gap in the market. Because there was no trusted environment for digital asset transactions that enabled both security and accessibility, everyone was forced to find their own tactical solutions. Typically, the choice was to store the assets in an exchange, which could increase risk, or in cold storage, which makes accessing the assets difficult and time-consuming. I knew there had to be a better way.

DACS is born

pervasive encryptionCyberattacks are becoming increasingly sophisticated, and it was clear that an effective digital asset custody platform had to push the boundaries of existing security capabilities. At the same time, DACS wanted it to be easy to integrate into customers’ existing IT infrastructure and to offer 24×7 availability.

When you think of nonstop availability in high-transaction environments, you think of IBM. DACS met with the IBM Systems team, and they filled me in on their work with pervasive encryption.

We embarked on a proof of concept to create a full-suite digital asset servicing platform. Based on IBM LinuxONE servers running Ubuntu Linux, the solution is planned to be offered  later this year as an appliance that can be deployed on premises as part of a private cloud environment or hosted by a third party. The platform is designed to scale both vertically and horizontally and to efficiently integrate with other client environments.

IBM pulled in resources from every level of the organization to help us bring DACS to life. As a lean start-up, we were delighted to see the IBM team mirror our own agile, nimble way of working.

Featuring the IBM Crypto Express 6S Hardware Security Module, the IBM LinuxONE servers enable pervasive encryption of all application data in-flight and at rest. We run the cloud-native DACS application within the IBM Secure Service Container solution on LinuxONE, a secured computing environment that protects highly sensitive data from both internal and external threats. In combination, the IBM technology and expertise helped us build a higher rated security foundation for the DACS platform than any competing solution, certified to FIPS 140-2 Level 41.

Seizing first-mover advantage

With guidance from IBM, we’ve developed a solution that’s the first of its kind.

It can take more than 24 hours to retrieve assets from cold storage custody solutions. With the DACS platform, we are intending that clients gain near-instant access to digital assets around the clock, removing barriers to trade. Another thing that sets our platform apart is its level of security. Whether in flight or at rest, private keys are always encrypted.

We used the enterprise capabilities of the IBM LinuxONE platform to create a system designed to mitigate both internal and external single points of failure. With a system that is designed for accountability, our customers can trade freely and build confidence that their assets are protected from theft or compromise.

We expect the global crypto asset management market to grow tremendously. With IBM, we accelerated development to capitalize on this exciting opportunity ahead of anyone else.

Smart contract and blockchain-based digital asset technologies are the future. We’re making sure that our customers can enter this exciting new field with confidence.

Want to know more? Read the case study for more details.

1.Source: https://www.ibm.com/security/cryptocards/hsms