CSR For-Profit Business Plan Summary

--- robots: noindex, nofollow --- Letter: (colleague) I’m reaching out to share about a potential for-profit spin-off business built on technology developed by Blockchain Commons. It will expand upon Blockchain Commons’ public initiative, Collaborative Seed Recovery (CSR), which addresses the critical issue of cryptographic key and data loss. It will do so through decentralized, user-controlled recovery solutions based on open standards like Gordian Envelope and Sharded Secret Key Reconstruction (SSKR). The for-profit venture will scale CSR technology into enterprise-ready white-label services, customizable applications, and training programs to support organizations that require secure recovery solutions for digital assets and identities. Our aim is to provide wallet vendors, cryptocurrency exchanges, and mission-driven organizations with tools to protect user sovereignty while ensuring flexibility, privacy, and interoperability. We’ve already begun early-stage discussions with potential partners and are planning initial deployments in 2025. To refine our approach, I’m seeking insights from colleagues with expertise in this space. If you’re interested, I’d be happy to share our business plan summary or arrange a time to discuss further. Looking forward to your feedback. -- Christopher Allen # CSR For-Profit Business Plan Summary **Company Name:** [Insert Company Name, appropriate for Collaborative Recovery Depositories services and products, and emerging multi-party cryptographic services.] **Mission Statement:** To empower organizations and individuals to protect self-sovereign digital assets and identities through secure, user-controlled, and non-custodial key and data recovery solutions while setting the standard for future collaborative cryptographic services. ## The Problem Cryptographic keys currently represent the greatest danger to the ownership of digital assets. There are a variety of issues that threaten companies storing assets. 1. **Traditional Methods Create Possibility for Loss.** Most current key storage solutions store the entire key, which increases the possibility for either loss or theft. It also creates liability for the company. 2. **Better Models Have Been Limited.** Ledger Wallet was the first company in the space to release a commercial system that went beyond simple key storage. With their Ledger Recover service, a key is sharded and given out to storage servers. Unfortunately, their method is proprietary, it requires KYC, and Ledger partnered with preselected entities that aligned with their own corporate interests. This resulted in considerable user blowback due to the compromise of user choice and privacy. Companies with more respect for these factors will have an advantage with the considerable percentage of cryptocurrency users who care about privacy and personal control of assets. 3. **Traditional Methods Create Vendor Lock-In**: Closed ecosystems such as traditional storage and the Ledger Recover system prevent interoperability. This limits the growth of the decentralized ecosystem and potentially leads to loss of funds or identity following company closure. Limiting ecosystem growth might be desirable for a market leader, but any other company will benefit from interoperability. 4. **Users Need More Flexible Solutions.** Rigid recovery frameworks, such as 2-of-3 online service models, cannot meet diverse user needs. A company able to offer more diversity, such as variable sharding schemes, the ability to store shards in offline backups, and the ability to recover keys socially (from friends, family, or business associates) will have a considerable value-add over a rigid system such as Ledger Recover. In short, companies need a way to minimize key loss, to reduce liability, and to offer users value that goes beyond traditional key storage systems. That's what Collaborative Seed Recovery offers. ## The Solution: Collaborative Seed Recovery (CSR) CSR offers a decentralized, standards-based recovery architecture with: - **Self-Sovereign Recovery**: Empowers users to store their cryptographic seeds securely using Sharded Secret Key Reconstruction (SSKR) while enabling diverse recovery methods such as trusted services, offline backups (e.g., NFC cards or safe-deposit boxes) and social key recovery with friends or trusted entities. - **Metadata**: Incorporates the storage of core private metadata (descriptors, transaction details, credentials) to support the recovery of crucial information that would otherwise be lost and to support the recovery of assets or identity even following the updating of standards. - **Interoperability**: Supports open standards like Gordian Envelope and SSKR to ensure seamless integration across wallets, exchanges, and platforms, avoiding vendor lock-in while enabling robust security review by multiple parties. - **Trustless Design**: Ensures no single point of compromise or failure, leveraging a trustless architecture that enhances resilience for users and mitigates liability risks for wallet providers and their partners. ## Market Opportunity The cryptocurrency and digital identity markets represent a massive opportunity: - Nearly $239 million was lost in the first quarter of 2024 due to private key hacks, marking a significant increase from the previous year. - [IB Times](https://www.ibtimes.com/nearly-239m-lost-so-far-2024-crypto-private-key-hacks-certik-3728007) - This was not unusual. For the first half of 2024, private key compromise losses ran to $408.9 million. That was just part of the $1.1 billion that was lost across 408 on-chain security incidents, averaging $2.9 million per incident. Phishing attacks were an even more prevalent cause than simple private key compromises, accounting for $497.7 million in losses. - [Info Security magazine](https://www.infosecurity-magazine.com/news/crypto-lost-web3-cyber-incidents/) - Over 2024 as a whole, losses from cryptocurrency hacks surged to $2.1 billion, with centralized finance platforms being the hardest hit. - [Coin Telegraph](https://cointelegraph.com/news/cryptocurrency-hacks-2024-cefi-defi-losses) - The global cryptocurrency market is projected to grow significantly by 2030, with estimates ranging from $9.8 billion to $12.1 billion in market size, reflecting compound annual growth rates (CAGR) between 11.4% and 12.8%. This growth is driven by increasing adoption, technological advancements, and broader acceptance across industries. - [Grand View Research](https://www.grandviewresearch.com/industry-analysis/cryptocurrency-market-report); [Allied Market Research](https://www.alliedmarketresearch.com/crypto-currency-market); Beyond Market Insights; [Fairfield Market Research](https://www.fairfieldmarketresearch.com/report/cryptocurrency-market) - The global digital identity solutions market is projected to experience substantial growth by 2030, with estimates ranging from $92.26 billion to $133.19 billion in market size, reflecting compound annual growth rates (CAGR) between 16.0% and 21.2%. This growth is driven by increasing demand for secure and seamless authentication across sectors like finance, healthcare, government, and e-commerce. - [Grand View Research](https://www.grandviewresearch.com/industry-analysis/digital-identity-solutions-market-report); [Fortune Business Insights](https://www.fortunebusinessinsights.com/digital-identity-solutions-market-108829); [MarketsandMarkets](https://finance.yahoo.com/news/digital-identity-solutions-market-worth-140100582.html); [Polaris Market Research](https://www.polarismarketresearch.com/industry-analysis/digital-identity-solutions-market) ## Business Model (These business model components are ordered by priority, based on the planned implementation timeline, with earlier entries reflecting initial focus areas.) 1. **White-Label Services and Applications** - **Pre-Built Solutions**: One-time fees for deploying turnkey depository services for organizations without existing authentication frameworks. - **Consulting Fees**: Hourly rates for integrating CSR into existing corporate authentication frameworks, enabling heterogeneous, secure implementations. - **Maintenance**: Annual subscription fees for ongoing support, updates, and customization. - **White-Label Applications**: Customizable applications branded for organizations, offering features such as secure key recovery, family asset management, and social recovery options tailored to their user base. 2. **Stand-Alone Applications** - **Reference Releases:** Reference applications (e.g., self-sovereign custody, family asset management) serve as ecosystem enablers and CSR demonstrations but are not a primary profit center. - **Freemium Model**: Basic functionality is free for individual users, with paid premium features such as advanced recovery options for families and small businesses. 3. **Pay-Per-Recovery Model** - Offer a pay-per-use recovery service for organizations or end-users, charging a fixed fee each time the recovery mechanism is utilized. - This approach provides flexibility for customers who prefer a low upfront investment. 4. **Training and Certification Program** - Provide training and certification for organizations or developers implementing CSR solutions. - Certified partners can display a "Gordian Seal" indicating compliance with CSR standards, enhancing their credibility and adoption. 5. **Gordian Seal Marketplace and Membership Program** - Develop a marketplace of vetted recovery service providers under the "Gordian Seal" certification program: - **Marketplace**: Enable users and businesses to choose depositories or recovery partners that meet their specific needs. CSR charges a platform fee or a percentage of transactions conducted through the marketplace. - **Membership Program**: Offer organizations the opportunity to join the Gordian Seal program, paying an annual fee to receive: - Certification of compliance with rigorous Gordian Seal standards. - Inclusion in the trusted Gordian Seal network, strengthening their credibility in the ecosystem. - Access to premium support, exclusive features, and discounts. 6. **Recovery Assurance Plans** - Partner with insurance providers to create specialized plans backed by CSR’s trustless architecture. - Provide recovery assurance plans or insurance services for organizations or end-users to guarantee recovery in case of catastrophic loss. ## Competitive Advantage - **Flexibility and Choice**: CSR offers diverse recovery options, including offline methods (e.g., NFC cards, safe-deposit boxes), recovery via trusted entities, and social recovery with family and friends. These meet varying user risks and requirements. This flexibility contrasts sharply with rigid proprietary systems, enabling tailored solutions for individuals and organizations. - **Privacy and Security**: CSR prioritizes user privacy by avoiding mandatory KYC and implementing a decentralized, trustless architecture. This ensures no single entity has full control over recovery, significantly reducing risks of compromise while bolstering resilience against regulatory overreach and centralized vulnerabilities. - **Open Standards and Interoperability**: Built on robust standards like Gordian Envelope and Sharded Secret Key Reconstruction (SSKR), CSR facilitates seamless integration across wallets, exchanges, and platforms. These open standards promote interoperability, trust, and broader ecosystem adoption, avoiding vendor lock-in. - **Diverse Authentication Methods**: CSR supports a wide array of authentication methods to ensure maximum flexibility and security for users. Advanced authentication could include biometrics, federated login, in-person verification, phone-based authentication, time-delays, and offline recovery mechanisms, catering to a variety of threat models and user preferences. - **Decentralized and Trustless Design**: By eliminating single points of failure or compromise, CSR ensures the integrity and reliability of recovery processes. This trustless design aligns with the principles of decentralization, appealing to privacy-conscious users and forward-thinking organizations. - **Regulatory Flexibility**: CSR’s non-custodial architecture and decentralized approach reduce exposure to strict regulatory requirements. Its adaptability to multi-jurisdictional compliance needs makes it an attractive option for global adoption, particularly for organizations operating across diverse legal environments. - **Scalability Across Industries**: While initially targeted at cryptocurrency and digital identity sectors, CSR’s architecture can scale to other industries, such as finance, healthcare, and intellectual property management, further expanding its market potential and use cases. - **Future-Ready Ecosystem**: CSR is not just a recovery solution—it is the foundation for a broader ecosystem of advanced cryptographic services. Positioned to lead in emerging areas like multi-party cryptographic signing, decentralized credential issuance, entitlement management, and secure data sharing, CSR ensures compatibility with evolving digital asset and identity use cases. ## Customer Traction - **Major Cryptocurrency Wallet Vendor**: Planning to implement CSR in 2025, with the potential to onboard with 50K to 250K users. - **Human Rights Foundation**: Evaluating a grant to host a CSR depository, demonstrating CSR’s appeal to a mission-driven organization. - **Active Pipeline**: Discussions with 12+ potential partners, representing a market opportunity of 1-2 million users. - **Ledger**: In response to user demand, Ledger has introduced our core SSKR standard as approved application directly on their Ledger device, enhancing security and redundancy. If Ledger were to integrate the more expansive Collaborative Seed Recovery (CSR) alongside their existing 2-of-3 Ledger Recover service, or update it to support CSR, it could significantly expand the addressable market by offering users more flexible and secure recovery options. Ledger's cumulative sales could reach around 7.2 million units by the end of 2025. ## Go-to-Market Strategy 1. **Core Depository Network**: Establish depositories representing diverse organization types (e.g., wallet vendors, cryptocurrency exchanges, mission-driven non-profits) and jurisdictions (e.g., US, EU, Canada, Switzerland, non-Five Eyes countries). 2. **Pilot Projects**: Launch pilots with high-profile partners to demonstrate CSR’s flexibility and security. 3. **Partnership Development**: Collaborate with DeFi platforms, Web3 projects, and advocacy organizations to drive CSR’s adoption. 4. **Marketing Outreach**: Publish thought leadership, host webinars, and sponsor industry events to position CSR as the industry standard. ## Funding Requirements We are seeking **$5 million** to accelerate growth: 1. **Development (33%)**: Expand the core technology team to complete the CSR platform. 2. **Enterprise Integration (33%)**: Build a team for seamless customer onboarding and support. 3. **Sales and Marketing (33%)**: Drive adoption through partnerships, pilots, and global outreach. ## Team - **Christopher Allen** (Board Chair, interim CTO): Christopher Allen is a seasoned technologist and entrepreneur with a distinguished career in internet security, cryptography, cryptocurrency, and digital identity. - Christopher founded Consensus Development, which licensed cryptographic toolkits and provided consulting to early internet security pioneers such as RSA Data Security, VeriSign, PGP, DigiCash, RedHat, Wells Fargo, and others. - As the co-author of the Transport Layer Security (TLS) 1.0 standard, he helped establish foundational protocols that secure online communications to this day. - In 1998, Certicom Corporation, a leader in cryptography, acquired Consensus Development in a cash-and-stock deal, strengthening its offerings to support secure communications using elliptic curve cryptography ([American Banker](https://www.americanbanker.com/news/tech-bytes-certicom-buys-security-tool-kit-firm)). - Allen served as Principal Architect at Blockstream, a pioneering Bitcoin technology company ([The Merkle](https://themerkle.com/cryptography-pioneer-christopher-allen-joins-blockstream/)). - He co-authored *#SmartCustody*, a guide to advanced cryptographic tools for secure digital asset management, and authored the "10 Principles of Self-Sovereign Identity," a framework for user-centric digital identity ([Coindesk](https://www.coindesk.com/markets/2016/04/27/the-path-to-self-sovereign-identity/)). - Allen's extensive leadership in cryptographic standards organizations and his work on decentralized technologies position him uniquely to lead initiatives focused on enhancing resilience and reliability in cryptographic key management ([LinkedIn](https://linkedin.com/in/ChristopherA)). - **Wolf McNally**: Team Lead for CSR technology, overseeing platform development and scalability. - **Enterprise Team Lead**: Recruitment in progress to ensure effective enterprise integration. - **CEO Search**: Actively seeking a CEO with financial industry experience to guide scaling and strategic growth. ## Vision CSR will evolve into the backbone of a collaborative cryptographic ecosystem: 1. **Advanced Services**: Enable multi-party cryptographic signing, credential issuance, entitlement management, and more. 2. **Global Adoption**: Build a trusted network of interoperable depositories that scale across jurisdictions and industries. 3. **Industry Leadership**: Establish CSR as the gold standard for secure, decentralized recovery solutions and cryptographic services. ## Call to Action Join us in building the future of resilient, user-controlled cryptographic systems. CSR is the foundation for a trustless, interoperable ecosystem that protects assets, identities, and lives.