Cobo, a crypto wallet startup headquartered in Beijing, has raised a $13 million Series A to enter new international markets. The round was led by Danhua Capital and Shuanghu Capital, and many well-known investment institutions in China followed suit.
Cobo wallet was created by Shixing “Discus Fish” Mao, who is also the co-founder and COO of Yibite, the first Bitcoin portal in China. CTO and co-founder Changhao Jiang used to be a platform engineer at Google and Facebook. In 2013, he launched China’s first crypto wallet, Bihang, which was later acquired by OKCoin. Cobo is the first leading wallet company in the world to offer Proof-of-Stake (PoS) and master-node rewards on user holdings, making it easy for users to grow their digital assets. In November 2017, Cobo was incorporated and completed the seed round financing. In December 2017, Cobo completed the pre-A round of financing, and its investment partners include Fengrui Investment and Linear Venture.
Cobo has completed three rounds of financing in less than a year since its establishment. Where does Cobo’s superior financing capability come from? The crypto wallet has always been an indispensable part of the industry, but the profit model has never been fully explained. What initiatives will Cobo take to develop the profit model? From the end of 2017 until now, Cobo has launched three types of products, what is its strategic layout in the future? In this article, we will analyze the development history of Cobo in the blockchain industry in the past ten years, the product strategy of Cobo, its future planning, and its perspective regarding the prospects of digital asset security.
In the past ten years, the crypto industry has experienced three waves, and security issues have become increasingly prominent
Mao, who is known as Discus Fish, said the crypto industry has experienced three major waves in the past decade. From 2008 to 2013, the digital currency was only known to a few. Most of the participants were foreign technology experts and there were few domestic communities. These participants were optimistic about the future of digital assets. They became the driving force for the exploration and development of cryptocurrency. At that time, while cryptocurrency was not applicable in the market, the technology developed at high speed.
Mao said the period from 2013 to 2016 was a preparatory state. The major change was that traditional internet giants were paying attention to the development of digital currency and trying to adopt bitcoin payments. At the same time, pioneering blockchain companies, such as the mining pool F2Pool and bitcoin miner Avalon, started to appear in the Chinese market. The first wave of entrepreneurship in the cryptocurrency market had just begun.
In 2013, the digital currency, represented by Bitcoin, attracted public attention for the first time due to price volatility. It rose from a few dollars to more than a thousand dollars and then quickly fell back. This price volatility revealed the flaw of cryptocurrency, and its public attention reached an all-time low for two years. For these blockchain enterprises that entered the market during the first wave of the entrepreneurial craze, these days were not easy and there were companies that went bankrupt and got liquidated. Yet, these surviving companies eventually grew into cryptocurrency giants during the third wave.
Since 2016, the industry has seen new changes, yet the rapid growth has also exposed more problems. Mao mentioned that in the past four years, there was a fourfold increase in security incidents every year. In the first half of 2018, nearly one billion dollars of assets were stolen by hackers. In mid-2017, the mining pool F2Pool suffered from a series of denial-of-service attacks. F2Pool lost more than 8,000 Ethereum cryptocurrencies, which were hacked by an anonymous attacker. Mao realized that even though F2Pool was well-established and technology-driven, it could still experience severe security problems. That was when the idea of creating a safe crypto wallet occurred to Mao.
How to effectively protect an individual investor’s digital asset, so that he or she can avoid loss in the case of insufficient risk awareness? How to make it easier for investors to safeguard their digital assets? With these questions in mind, Mao decided to build the Cobo wallet and improve the security infrastructure of the crypto industry.
Cobo: an integrated digital asset storage and management platform, security is the key
Mao emphasized that safety is not only the focus of Cobo, but also what makes it competitive in the cryptocurrency market. Asset security is the core of the blockchain industry. Therefore, Cobo has carried out multi-dimensional security deployment and reinforcement in terms of product development, functional design, and user experience. At present, Cobo has nearly 500,000 users. The Cobo wallet supports more than ten major digital assets, such as Bitcoin, Ethereum and EOS, and will continue to expand its types of cryptocurrency in the future.
Cobo provides users with integrated digital asset management tools and services. Based on the amount of users’ digital assets, Cobo provides them with three different kinds of services:
For newcomers who have little knowledge of the industry and whose assets fall below hundreds of thousands of renminbi, Cobo offers the mobile-based App Cobo Wallet; for users with hundreds of thousands to millions of digital assets, Cobo has just released the Cobo Vault; for users whose digital assets are above tens of millions, such as traditional VC or family funds, Cobo has the Cobo Custody, which is a management service.
In terms of products, Cobo is very different from existing digital asset wallets:
Compared to most crypto wallets on the market, Cobo Wallet’s major feature is the combination of centralized and decentralized wallets, namely Cloud wallets and HD wallets. At present, most domestic users use decentralized wallets such as token, Kcash, etc. They provide users with decentralized mobile asset management tools, and users need to manage their own private keys, which can be a double-edged sword. While users could manage their own digital assets, for newcomers who have little knowledge of the cryptocurrency market, it is often the case that their private keys are improperly stored and their assets are lost.
Cobo provides a solution for both users. In addition to the decentralized HD wallet, users manage their own private keys. For newcomers, Cobo offers them the choice of Cloud wallets and undertakes asset security management on their behalf. Users do not need to import their private keys, as the platform is managed by Cobo. Cobo’s Cloud wallet also includes the POS function for the first time, allowing users to benefit from the mining revenue of the POS cryptocurrency.
“The idea behind Cobo wallet is unprecedented in the world. Users manage their assets through Cobo wallet and we help him with POS mining, which can bring great benefits. The annualized income could be five percent to 200 percent of the cryptocurrency price, depending on the type of digital currency and the market condition at that time. POS mining is the core feature of Cobo,” Mao added.
Cobo has recently released its first hardware wallet, Cobo Vault. What are the differences between Cobo Vault and other hardware wallets such as Trezor, Ledger, and ColdLar?
“There is a lot of difference. Cobo tries to bring the utmost security to multiple levels. First, Cobo is the world’s first hardware wallet that uses the military-grade protection system. Second, it uses bank-level encryption chips to make sure that private keys are securely stored. The Cobo Vault also uses the website verification method for new computer users to effectively defend against supply chain attacks that might compromise the system. Moreover, Cobo Vault has a unique crypto banking system to better protect property and digital assets if unfortunate incidents such as kidnapping occur,” Mao said.
Feature Image From Cobo Official Medium.