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Company Name:<\/strong> River<\/p>\n Founders:<\/strong> Alexander Leishman<\/p>\n Date Founded:<\/strong> February 2019<\/p>\n Location of Headquarters:<\/strong> Columbus, OH<\/p>\n Amount of Bitcoin Held in Treasury:<\/strong> Proof of reserves launching soon<\/p>\n Number of Employees:<\/strong> 50<\/p>\n Website:<\/strong> https:\/\/river.com\/<\/a><\/p>\n Public or Private?<\/strong> Private<\/p>\n How do you make a bitcoin-only brokerage profitable? The answer isn\u2019t complicated.<\/p>\n You offer the highest quality services to as many people as possible for a good price.<\/p>\n This is the strategy Alexander Leishman and the team at River<\/a> employ.<\/p>\n And River\u2019s high-quality services largely hinge on staying true to what Leishman calls \u201cthe Bitcoin ethos,\u201d at the core of which is the \u201cnot your keys, not your coins\u201d philosophy.<\/p>\n \u201cAt River, we decided to take the slow, hard way, which allowed us to build our own custody systems and actually custody our clients’ Bitcoin and operate as a financial institution,\u201d Leishman told Bitcoin Magazine.<\/p>\n Building on a strong foundation is clearly important to Leishman, someone who operates from his own notable educational and professional base.<\/p>\n Leishman completed an undergraduate degree in aerospace engineering and holds a master\u2019s degree in computer science from Stanford.<\/p>\n His r\u00e9sum\u00e9<\/a> boasts of experience ranging from a robotics engineering intern to a cryptography researcher at Stanford to a software security engineer for Airbnb.<\/p>\n In so many words, he has notable technical abilities \u2014 the type you\u2019d want someone who secures millions of dollars in bitcoin on behalf of clients to have.<\/p>\n And even with all of his knowledge and experience, he\u2019s still humble enough to be mindful of the risk involved in what he does.<\/p>\n \u201cOur number one focus above all else is always don’t fuck up,\u201d said Leishman.<\/p>\n \u201cPeople really underestimate that that doesn’t happen by default. You have to actively spend 50 plus percent of your resources to contain entropy and make sure you’re always improving systems and procedures, building the automation and building everything you need to contain those risks and preempt new risks,\u201d he added.<\/p>\n \u201cThat’s actually what the majority of the work goes into.\u201d<\/p>\n These are sobering words in an industry that has a reputation for exchanges going bust and\/or losing client funds. And Leishman is aware of this.<\/p>\n \u201cIt turns out in this industry there aren’t a whole lot of trustworthy people,\u201d said Leishman.<\/p>\n \u201cWe’ve seen even the most regulated trust companies go bust. They’ll tell you, we have this certification and this license and this, this and this. Then, when it all comes out, you find out this guy was having people deposit coins to a Ledger that they lost the key to three years ago,\u201d he added.<\/p>\n \u201cThat’s why we do things ourselves.\u201d<\/p>\n Given how difficult it is to safely run a Bitcoin company and the fact that, with his credentials and experience, Leishman could make a good living in a number of fields, why did he gravitate toward Bitcoin?<\/p>\n \u201cThe reason that I got into Bitcoin was because I went down the economics rabbit hole on the side in college,\u201d recalled Leishman. \u201cI started reading about Austrian economics and eventually read The Denationalization of Money<\/em> by Friedrich Hayek.\u201d<\/p>\n He was drawn to the idea of challenging central banking as he became more aware of the dangers of centralized power structures of all types \u2014 from The Fed to supranational entities like the EU.<\/p>\n Before finding bitcoin, Leishman wanted to create his own form of money that the government couldn\u2019t control.<\/p>\n \u201cI wanted to create a commodity-backed money, but it would have been centralized,\u201d he said.<\/p>\n \u201cI couldn’t really figure out how to do it without going to jail, and I didn\u2019t know how to make a business out of it,\u201d he added.<\/p>\n \u201cWhen I came across Bitcoin I was like \u2018My gosh this fulfills the prophecy \u2014 this is going to change everything.\u2019 I just knew I had to work on it.\u201d<\/p>\n And work on it he did. After college, he completed a coding bootcamp and then headed west to San Francisco to find work in what was then ground zero for the Bitcoin industry in the US.<\/p>\n \u201cI didn\u2019t have a job before I moved to the Bay Area,\u201d recalled Leishman. \u201cI moved there because back then that’s where all the Bitcoin stuff was happening, and I wanted to be in the center of it.\u201d<\/p>\n It didn\u2019t take him long to find work, though. In March 2014, Leishman landed his first job in the Bitcoin space with a Taiwanese Bitcoin exchange called MaiCoin<\/a>, which specialized in bitcoin trading and payments.<\/p>\n At MaiCoin, Leishman identified and fixed security vulnerabilities and built APIs used for merchant services.<\/p>\n Beyond his experience at MaiCoin, Leishman remembers his time in the Bay Area fondly.<\/p>\n \u201cThe culture was very different back then,\u201d he said.<\/p>\n \u201cThere wasn’t really this concept of Bitcoin maximalism. No one was offended by new coins because people would basically use these things to experiment with new ideas,\u201d he added.<\/p>\n \u201cIt was much more free, more academic, like people could try ideas without the economic component and without creating this dichotomy between scammers and legit people as much.\u201d<\/p>\n From one angle, these might sound like strange words from someone who runs a bitcoin-only business. From another, one might imagine that Leishman learned more than a handful of lessons firsthand about why Bitcoin is different from all other crypto networks and assets during his time in San Francisco.<\/p>\n Plus, he said that \u201ceveryone knew Bitcoin was king \u2014 no one was trying to come at it.\u201d<\/p>\n After MaiCoin, Leishman completed his graduate studies at Stanford, where he worked as a teaching assistant for a course on Bitcoin and other cryptocurrencies taught by Dan Boneh<\/a>, co-founder of Stanford\u2019s Computer Security Lab<\/a>, and then built secure infrastructure for asset management for Polychain Capital<\/a>, a crypto hedge fund.<\/p>\n By early 2019, he was ready to start his own endeavor.<\/p>\n Harnessing what he\u2019d learned about crypto security and payments, Leishman set out to build a Bitcoin platform that not only featured a top-notch multisig security model for client funds at its core but also helped users more readily utilize bitcoin as a medium of exchange via the Lightning Network<\/a>, as River provides users with custodial Lightning wallets<\/a>.<\/p>\n Leishman explained building out all of the infrastructure for River is what distinguishes it from other companies like it. When brokerages use third-party custodians they give up control over what they can offer their clients.<\/p>\n \u201cThey can only use whatever their third-party decides to build,\u201d said Leishman of exchanges that don\u2019t build their own custodial infrastructure. \u201cAnd the third parties are all multi-coin custodians that rarely prioritize Bitcoin stuff.\u201d<\/p>\n With Leishman at the helm wearing the hats of CEO and CTO, River has a distinct advantage in forging its own path.<\/p>\n \u201cThinking like a good engineer leads to a good business,\u201d said Leishman.<\/p>\n \u201cI’m the person leading the company. I know how to build what we need to build. I know how to ship what we need to ship to serve our customers,\u201d he added.<\/p>\n \u201cFor a company like ours, I think it is the right archetype.\u201d<\/p>\n While Bitcoin is becoming more popular as a store of value, Leishman thinks we still have a ways to go before it becomes a more widely accepted medium of exchange.<\/p>\n Plus, River\u2019s bread and butter is its brokerage service.<\/p>\n \u201cWe make most of our money on our bitcoin brokerage,\u201d Leishman said.<\/p>\n He also noted that River makes money off of its other services, like running two major Lightning nodes, but that the revenue produced from this pales in comparison to what the company earns from its brokerage service, which River continues to work to improve.<\/p>\n \u201cThere\u2019s always more that we can be doing to make the process simpler and higher quality to sign up, buy \u2014 and custody feels like you have all your security needs covered,\u201d Leishman said.<\/p>\n \u201cAlso, really where the hard work is, is the interface with the fiat system. And so the big trend that we’re leaning into in the next three to five years, in my opinion, is that Bitcoin is going to become, still growing as a store of value,\u201d he added.<\/p>\n \u201cWe’re entering an era where people are going to be saving in dollars and Bitcoin, and the seamless back and forth between Bitcoin and fiat is where we’re focused.\u201d<\/p>\nThe Engineer<\/h2>\n
Why Bitcoin?<\/h2>\n
Bitcoin And The Bay Area<\/h2>\n
Building River<\/h2>\n
More Of The Same \u2014 For Now<\/h2>\n