Company name: River

Founders: Alexander Leishman

Date of establishment: February 2019

Location of the head office: Columbus, Ohio

Amount of Bitcoin in Treasury: Proof of Reserves to be launched soon

Number of employees: 50

Website: https://rivier.com/

Public or private? Private

How do you make a bitcoin-only brokerage profitable? The answer is not complicated.

You provide the highest quality services to as many people as possible at a good price.

This is the strategy that Alexander Leishman and the team at River employ.

And River’s high-quality services depend largely on staying true to what Leishman calls “the Bitcoin ethos,” at the heart of which is the philosophy “not your keys, not your coins.”

“At River, we decided to take the slow, hard road, which allowed us to build our own custodial systems and hold our customers’ Bitcoin and operate like a financial institution,” Leishman told Bitcoin Magazine.

For Leishman, it is clearly important to build on a strong foundation, as he operates from his own educational and professional background.

The engineer

Leishman earned a bachelor’s degree in aerospace engineering and a master’s degree in computer science from Stanford.

His resume boasts work experience ranging from a robotics engineering intern to a cryptography researcher at Stanford to a software security engineer for Airbnb.

In short, he has remarkable technical skills, the kind you would expect from someone who secures millions of dollars worth of bitcoins on behalf of his clients.

And even with all his knowledge and experience, he is still humble enough to be aware of the risks his work entails.

“Our main focus is always not to make mistakes,” Leishman said.

“People really underestimate that that doesn’t happen by default. You have to actively spend more than 50 percent of your resources on containing entropy and making sure that you’re always improving systems and procedures, building the automation, building everything that you need to do to contain those risks and get ahead of new risks,” he added.

“That’s actually where most of the work goes.”

These are sobering words in an industry known for exchanges going bust and/or losing client money, and Leishman is aware of this.

“It turns out there aren’t many trustworthy people in this industry,” Leishman said.

“We’ve seen even the most regulated trust companies go bankrupt. They’ll tell you, we have this certification and this license and this, this and this. And then, when it all comes out, you find out that this guy was getting people to deposit coins into a Ledger that they lost the key to three years ago,” he added.

“That’s why we do it ourselves.”

Why Bitcoin?

Considering how difficult it is to run a Bitcoin business safely and the fact that Leishman could make a good living with his qualifications and experience in various industries, why did he choose Bitcoin?

“The reason I got into Bitcoin was because I was a minor in economics in college,” Leishman recalls. “I started reading Austrian economics and ended up reading The denationalization of money by Friedrich Hayek.”

He was drawn to the idea of ​​challenging central banking because he was increasingly aware of the dangers of centralized power structures of all kinds – from the Fed to supranational entities like the EU.

Before discovering Bitcoin, Leishman wanted to create his own form of money that the government couldn’t control.

“I wanted to create a commodity-backed money, but it would be centralized,” he said.

“I couldn’t really figure out how to do it without going to jail, and I didn’t know how to make a business out of it,” he added.

“When I came across Bitcoin I thought, ‘Oh my gosh, this is fulfilling the prophecy — this is going to change everything.’ I just knew I had to work on it.”

And he worked at it. 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 U.S.

Bitcoin and the Bay Area

“I didn’t have a job before I moved to the Bay Area,” Leishman recalls. “I moved there because that was where all the Bitcoin stuff was happening at the time, and I wanted to be in the middle of it.”

However, it didn’t take long for him to find work. In March 2014, Leishman got his first job in the Bitcoin space at a Taiwanese Bitcoin exchange called MaiCoin, which specialized in Bitcoin trading and payments.

At MaiCoin, Leishman identified and fixed security issues and built APIs for trading services.

In addition to his experience at MaiCoin, Leishman looks back fondly on his time in the Bay Area.

“The culture was very different back then,” he said.

“There 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,” he added.

“It was much freer, more academic, like people could try out ideas without the economic aspect and without there being this division between scammers and legitimate people.”

From one angle, these might sound like strange words coming from someone who runs a bitcoin-only company. From another angle, you could imagine that Leishman has learned more than a handful of first-hand lessons about what makes Bitcoin different from every other crypto network and asset during his time in San Francisco.

Furthermore, he said that “everyone knew Bitcoin was king — no one tried to conquer it.”

After MaiCoin, Leishman completed his undergraduate studies at Stanford, where he worked as an adjunct faculty member for a course on Bitcoin and other cryptocurrencies taught by Dan Boneh, co-founder of Stanford’s Computer Security Lab. He then built a secure asset management infrastructure for Polychain Capital, a crypto hedge fund.

At the beginning of 2019 he was ready to start his own business.

Building a river

Using what he had learned about crypto security and payments, Leishman set out to build a Bitcoin platform that not only featured an excellent multisig security model for customer funds, but also helped users more easily use Bitcoin as a medium of exchange via the Lightning Network, as River provides Lightning wallets to users.

Leishman explained that building all the infrastructure for River sets it apart from other companies like River. When brokers use third-party custodians, they give up control over what they can offer their clients.

“They can only use what their third party decides to build,” Leishman said of exchanges that don’t build their own custodial infrastructure. “And the third parties are all multi-coin custodians that rarely prioritize Bitcoin stuff.”

With Leishman at the helm, who serves as both CEO and CTO, River has a clear advantage in charting its own course.

“If you think like a good engineer, it leads to a good company,” Leishman said.

“I am the person who runs 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,” he added.

“I think this is the right archetype for a company like ours.”

More of the same – for now

While Bitcoin is becoming increasingly popular as a store of value, Leishman believes we still have a long way to go before it becomes a more widely accepted medium of exchange.

In addition, Rivers’ main specialty is the brokerage service.

“We make the majority of our money from our bitcoin brokerage,” Leishman said.

He also noted that River makes money from its other services, such as running two large Lightning nodes, but that the revenue from these is dwarfed by what the company makes from its brokerage service, which River is still trying to improve.

“There’s always more we can do to make the process easier and better for you to sign up, buy and feel like all your security needs are covered,” Leishman said.

“And where the real work is is the interface with the fiat system. And so the big trend that we’re betting on over the next three to five years, in my opinion, is that Bitcoin continues to grow as a store of value,” he added.

“We are entering an era where people are going to save in dollars and Bitcoin, and we are focused on the seamless transition between Bitcoin and fiat.”