Company Name: River
Founders: Alejandro Leishman
Date of foundation: February 2019
Headquarters location: Columbus, Ohio
Amount of Bitcoin held in treasury: Reservation test coming soon
Number of employees: 50
Website: https://river.com/
Public or private? Private
How can a Bitcoin-only brokerage firm be profitable? The answer is not complicated.
Offer the highest quality services to as many people as possible at a good price.
This is the strategy of Alexander Leishman and the team at River use.
And River’s high-quality services depend heavily on staying true to what Leishman calls “the spirit of Bitcoin,” at the core of which is the philosophy “if it’s not your keys, it’s not your coins.”
“At River, we decided to take the slow and hard route, which allowed us to build our own custody systems and actually hold custody of our clients’ Bitcoin and operate as a financial institution,” Leishman told Bitcoin Magazine.
Building on a solid foundation is clearly important to Leishman, someone who operates from his own notable educational and professional base.
The engineer
Leishman earned a bachelor's degree in aerospace engineering and a master's degree in computer science from Stanford.
His resume His experience ranges from robotics engineering intern to cryptography researcher at Stanford to software security engineer for Airbnb.
Simply put, he has remarkable technical skills, the kind you'd want 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 risk involved in what he does.
“Our main goal above all else is always to not make mistakes,” Leishman said.
“People really underestimate the fact that that doesn’t happen by default. You have to actively devote more than 50 percent of your resources to containing entropy and making sure that you’re always improving systems and procedures, creating automation and creating everything that’s necessary to contain those risks and anticipate new ones,” he added.
“That's actually what most of the work is about.”
These are sobering words in an industry that has a reputation for being one where exchanges go bust or lose client funds, and Leishman is aware of that.
“It turns out there aren’t a lot of trustworthy people in this industry,” Leishman said.
“We’ve seen even the most regulated trust companies go bankrupt. They tell you they have this certification and this license and this, this and this. Then when it all comes to light, you find out this guy was getting people to deposit coins into a Ledger whose key they had lost three years ago,” he added.
“That's why we do things ourselves.”
Why Bitcoin?
Considering how difficult it is to securely 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 turn to Bitcoin?
“The reason I got into Bitcoin was because I got into the world of economics while I was in college,” Leishman recalls. “I started reading about Austrian economics and eventually read The denationalization of money by Friedrich Hayek.”
The idea of challenging central banking appealed to him as he became more aware of the dangers of centralized power structures of all kinds, from the Federal Reserve 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 have been centralized,” he said.
“I didn't know 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 God, this is fulfilling prophecy: this is going to change everything. ’ I knew I had to work on it.”
And he got to work. After college, he completed an intensive programming course and headed west to San Francisco to find work in what was then ground zero for the bitcoin industry in the United States.
Bitcoin and the Bay Area
“I didn’t have a job before I moved to the Bay Area,” Leishman recalls. “I moved there because back then it was where all the Bitcoin stuff was happening and I wanted to be at the center of it all.”
However, it didn't take long for him to find work. In March 2014, Leishman landed his first job in the Bitcoin space at a Taiwanese Bitcoin exchange called Mai Coinwhich specialized in Bitcoin trading and payments.
At MaiCoin, Leishman identified and fixed security vulnerabilities and created APIs used for commercial services.
Beyond his experience at MaiCoin, Leishman fondly remembers his time in the Bay Area.
“The culture was very different back then,” he said.
“There wasn’t really this concept of Bitcoin maximalism. Nobody was offended by new coins because people were basically using them to experiment with new ideas,” he added.
“It was much freer, more academic, people could try out ideas without the economic component and without creating so much of a dichotomy between scammers and legitimate people.”
From one perspective, these words might seem strange for someone who runs a business that only deals in Bitcoin. From another perspective, one could imagine that Leishman learned more than a handful of first-hand lessons about why Bitcoin is different from all other crypto networks and assets during his time in San Francisco.
He also said that “everyone knew that Bitcoin was king, no one was trying to catch up with it.”
After MaiCoin, Leishman completed his graduate studies at Stanford, where he worked as a teaching assistant in a course on Bitcoin and other cryptocurrencies taught by Dan Bonehco-founder of Stanford Computer Security Laband then built a secure infrastructure for asset management for Polychain Capitala cryptocurrency hedge fund.
By early 2019, he was ready to start his own venture.
Building the river
Leveraging what he had 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 customer funds at its core, but also helped users more easily use Bitcoin as a medium of exchange through Lightning NetworkSince River offers users custody Lightning Wallets.
Leishman explained that building the entire infrastructure for River is what sets it apart from other similar firms. When brokerages use third-party custodians, they give up control over what they can offer their clients.
“They can only use whatever 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-currency custodians who rarely prioritize Bitcoin stuff.”
With Leishman at the helm, serving as CEO and CTO, River has a clear advantage in forging its own path.
“Thinking like a good engineer leads to good business,” Leishman said.
“I'm 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.
“For a company like ours, I think it’s the right archetype.”
More of the same, for now
While Bitcoin is becoming more 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.
Furthermore, River's livelihood is its brokerage service.
“We make most of our money from our bitcoin brokerage,” Leishman said.
He also noted that River makes money from its other services, such as 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.
“There is always more we can do to simplify and improve the quality of the registration, purchasing and safekeeping process, and make you feel like all your security needs are covered,” Leishman said.
“Also, the hardest work is at the interface with the fiat system. So the big trend that we’re going to see over the next three to five years, in my view, is that Bitcoin will become a store of value that will continue to grow,” he added.
“We are entering an era where people will save in dollars and bitcoins, and we will focus on the seamless exchange between bitcoins and fiat currencies.”
