Despite Bitcoin (BTC) often being hailed as the ultimate "hold asset," not everyone is prepared for self-management in a world where a convenient and seemingly trustworthy intermediary still plays a significant role.
Circuit is a company that provides enterprise-level recovery solutions for digital assets, betting that an increasing number of institutions will choose its recovery system to prevent catastrophic losses.
On Monday, the company announced the public launch of its institutional-grade cryptocurrency recovery engine, powered by its Automated Asset Extraction (AAE) technology. When private keys are lost or a threat is detected, the system automatically transfers assets to a pre-authorized secure vault.
The solution is initially serving two institutional users: the UAE-based custodian Tungsten, and Palisade, which provides custody infrastructure for cryptocurrency exchanges and tokenization services.
Circuit founder and CEO Harry Donnelly stated that the market for lost keys and custody errors is currently underserved, especially against the backdrop of an increasing influx of institutional users into the crypto space.
"Permanent loss of assets is one of the biggest barriers to mainstream adoption," Donnelly said in a written statement to Cointelegraph. "We see extensive media coverage of cryptocurrency theft incidents precisely because these losses are irreversible, with no 'undo' button like in traditional finance."
Donnelly noted that institutions must ensure their assets can be recovered before they truly commit to entering the space.
Many Bitcoin supporters believe that lost coins are a form of "donation" to the network, as they cannot be retrieved, effectively reducing the circulating supply and potentially driving up prices.
Donnelly generally agrees with this view, but he stated that from a practical operational standpoint, this notion does not hold, especially considering broader adoption.
"For institutional users, the idea that lost Bitcoin is merely a 'donation' to other holders is hard to accept," he said.
While specific numbers vary, Ledger reports that approximately 2.3 million to 3.7 million BTC are currently lost or unrecoverable, accounting for about 11% to 18% of Bitcoin's fixed supply.
"The vast majority of people do not have the capability to truly self-manage assets; it is technically very complex and carries irreversible risks," Donnelly said. "The reason traditional finance has intermediaries and custodians is that they can provide security when problems arise."
Related: Stablecoin Payment Innovations: From Cross-Border Remittances to Retail Scenarios, Where to Next?
Original article: “Circuit Launches Recovery System to Solve the Cryptocurrency 'Permanent Loss' Dilemma”
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