I recently had a chance to chat with Eric Lombrozo, the technologist who has been a pioneer in developing security solutions in the cryptocurrency ecosystem.
Introduced to Bitcoin in 2011, Lombrozo eventually became a member of the Bitcoin core development group and a contributor to the Ripple and Ethereum open source projects.
He co-founded Ciphrex in 2013 with his father, Enrique Lombrozo, an MIT alumnus with extensive business and technology experience.
Lombrozo told me that, when he first learned about bitcoin, he liked the open nature of the system and the lack of barriers to entry but he saw flaws in bitcoin.
Anybody could just jump in. But I realized it could be better.
Part of the problem with bitcoin’s initial design was that it was not created to be a solution for the mainstream financial sector.
There are things that are more annoyances and some things that are more problematic. The early bitcoiners were not finance industry guys. They were cyber punk anarchist type characters.
The consensus nature of bitcoin in particular makes it complicated to upgrade the platform.
Consensus protocols are very sensitive to small changes. So that means that migration paths are difficult. From 1.0 to 2.0… With consensus protocols, everyone has to upgrade at once…. As we get more experience with this technology, it is difficult to integrate more insights into to it. Developers tend to be conservative.
Ciphrex’s flagship solution is the mSIGNA wallet, a next-generation deterministic multisignature wallet.
The wallet space is becoming increasingly crowded but Lombrozo believes that mSIGNA’s deterministic design from conception gives it a first mover advantage.
We pioneered the idea of deterministic multisig. The initial implementation of bitcoin where pregenerated keys are used is very very impractical. You need to created pregenerated keys for every backup. With deterministic keys, you only have to do that sequence once. We combined that with multisigs and that allowed it to generate an astronomical number of addresses.
Lombrozo notes there are more company’s who have added deterministic key functionality but they are adopting it for wallet systems that are already build. For
Ciphrex, this was the design from the beginning.
Our whole platform is designed around this concept.
In January 2015, Ciphrex raised $500,000 in its first funding round. Lombrozo and his partners are looking for additional funding:
We closed a half million funding round in January. We are working on a second round. There is a lot of ideas we have for products that we still have built out that we haven’t buiilt out. We would like to have a much larger support team. We would like to fund core reasearch and development aht are needed to complete this technology.
Ciphrex’s technology is being utilized by some high profile customers.
Some of our more sophisticated users would be the Ethereum and Factom projects.
We also have enterprise users that want to integrate it into currency exchanges and insured vaults… like a white label storage solution.