Why Coinbase Picked Up Unbound Security As Part Of Its Recent Acquisition Spree
Disclaimer: The Industry Talk section features insights by crypto industry players and is not a part of the editorial content of Cryptonews.com.
The need for better privacy-focused solutions for dApps and DeFi protocols is at an all-time high. As the total value locked (TVL) in DeFi continues to skyrocket, the underlying distributed ledger technology is in dire need of more advanced security measures, especially when it comes to safeguarding users’ private data. While many projects have emerged, most of which aim to add more security and offer greater control to users over their personal data, only a few have achieved a moderate level of success.
Those startups that have succeeded are quickly becoming targets for the leading brands in the field. Pursuant to that point, Coinbase, one of the leading cryptocurrency exchanges, has acquired Israel’s Unbound Security to cater to this growing need for privacy in the blockchain ecosystem. Unbound has developed several secure and easy ways to transfer and store cryptocurrencies through cryptographic key management and protection.
As Coinbase seeks to expand its products and services globally, this latest acquisition adds another layer to its growing ecosystem. Unbound Security, founded by Guy Peer and Yehuda Lindell, uses a mixture of cryptography and secure MPC (multi-party computation), helping Coinbase ensure users can quickly and securely deploy, transfer, and store crypto assets.
MPC As The Answer To Blockchain’s Data Privacy Woes
MPC (multi-party computation) is frequently touted as a powerful solution to overcome blockchain data privacy problems. The innovative technology uses shared computation without ever compromising the privacy and security of data. Simply put, it is an advanced method of distributing computation across a network of individuals whereby one party can’t see another’s information (data).
Between 2020 and 2021, cybercriminals siphoned off billions of dollars in digital assets. From CEXs to DEXs, and DeFi to hardware wallets – malicious elements have targeted almost every existing source of digital assets. As a result, the cryptoverse needs a better privacy-enhancing solution.
This is where MPC comes into the picture. But there’s a problem. As a standalone solution, MPC offers end-to-end privacy. Fortunately, when paired with blockchain technology, MPC supports an infrastructure that not only facilitates privacy but also enables dApps and DeFi protocols to ensure that all MPC transactions get recorded as timestamped “source of truth” entries on the blockchain network.
Blockchain emphasizes transparency by design, while MPC introduces confidentiality through a network of computation nodes that handle encrypted data with zero knowledge of its contents. By combining distributed ledger technology (DLT) and multi-party computation (MPC), Partisia Blockchain empowers enterprises to take advantage of the benefits of decentralized technologies without compromising the security and privacy of data, even during cross-chain transactions.
The Partisia Blockchain serves as a public blockchain built for trust, transparency, privacy, and rapid speed for transaction finalization. As an additional benefit, Partisia also introduces the concept of Bring Your Own Coin (BYOC), which allows dApps and DeFi protocols to integrate with different blockchain network platforms via a cross-chain account, ensuring higher interoperability and faster transaction speeds.
As a leading CEX, Coinbase’s acquisition of Unbound showcases that blockchain projects are warming up to the idea of adopting MPC as a promising solution that adds the much-needed privacy feature on its otherwise transparent and distributed ledger. Partisia caters to this need with its unique solution that maintains interoperability alongside the transparency of blockchain technology while ensuring end-to-end privacy using multi-party computation, conveying the best attributes of both technologies to enterprises and consumers alike.
Commenting on this latest move by Coinbase, Kurt Nielsen, President of Partisia Blockchain, notes, “There has recently been a lot of consolidation within this field of use. SBI Holding bought into Sepior a couple of years ago, Paypal bought Curv and now Coinbase acquired Unbound. The main driver for the current consolidation is likely that many commercial banks are offering cryptocurrencies to their customers and need a crypto-friendly custodian solution. MPC based key management provides that.”
