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I always wonder how they manage that much money in cryptocurrency. Do they keep all of it in a single wallet ? Is it split in several smaller wallets ?

thoughtstheseus 6y ago
Hardware based wallets kept offline until needed I suppose. Makes me wonder where banks keep their money...
conanbatt 6y ago
There are special services by Coinbase and other brokers alike for this.
- londons_explore 6y ago
  If such a service loses your coins, you could sue the service. But the service will likely be bankrupt. I assume nobody would want to insure such a large and unknown risk...
  - conanbatt 6y ago
    The funny reveal about bitcoin is that it is literally impossible to have a 100% safe way to store them. If you have them, you could lose them, if someone el se has them, they can be stolen, etc etc. But these services are no joke. Xapo had repurposed a former military base in the middle of the swiss alps, with special vaults and security procedures. I'm talking about tens of millions spent in resources and human ingenuity to keep this safe.
    - alwillis 6y ago
      The funny reveal about bitcoin is that it is literally impossible to have a 100% safe way to store them. This isn't accurate. The gold standard for bitcoin is using multisig, where multiple (m of n) keys are required to access the bitcoin. For example, anyone can setup a 3 of 5 multisig which requires 3 of the 5 keys to spend or move the bitcoin. These keys would be stored in separate hardware wallets stored in vaults anywhere in the world. In the case of MicroStrategy, one could imagine them using multisig, so that if Michael Saylor dies in a tragic boating accident, board members of his company would be able to access the bitcoin the company owns. Multisig has been available almost since the beginning of bitcoin but only recently became more mainstream as the value of bitcoin continues to increase. [1] https://en.bitcoin.it/wiki/Multisignature https://en.bitcoin.it/wiki/Multisignature [2] 10x Security Bitcoin Guide—https://btcguide.github.io https://btcguide.github.io
      - conanbatt 6y ago
        > These keys would be stored in separate hardware wallets stored in vaults anywhere in the world. Nothing is 100% safe. If 3 of those locations are compromised the bitcoins would be lost permanently. Also its a very inaccessible way to store bitcoin, and not scalable for all use cases.
        alwillis 6y ago
        Also its a very inaccessible way to store bitcoin, and not scalable for all use cases. It depends on how much money someone is holding. It's certain more secure than a single password on a banking site and your mother's maiden name. Multisig allows for a possible catastrophic incident to occur—a fishing attack, a security vulnerability with your bitcoin wallet, loosing your pin, etc—and not lose your money. A 2 of 3 multisig is something tech savvy people could easily do with a hardware wallet, a smartphone or computer and a safe deposit box, for example. If you're a multinational corporation with over a $1 billion in bitcoin like MicroStrategy, it may make sense to have keys in different parts of the country or in different countries, especially if your adversaries are state level actors.
  - alwillis 6y ago
    I assume nobody would want to insure such a large and unknown risk... You're kidding, right? With billionaires, publicly traded corporations, hedge funds and insurance companies investing in bitcoin (or using it as their treasury), there's a whole new crypto financial industry emerging. For example, Knox: https://www.knoxcustody.com https://www.knoxcustody.com Bitcoin custody that is insured to the full value of holdings for the risk of theft and loss, including collusion.
Proven 6y ago
They are morons for buying Bitcoin like they did, but they'd be even bigger morons if they actually tried to use Bitcoin by themselves (like these other commenters suggest). If they have any brains left, they outsourced that.
zaptheimpaler 6y ago
Offline wallets plus a private security team should be justifiable given how much is at stake. The physical security aspect would actually be not so expensive since a small room could store all the bitcoin in the world.

thoughtstheseus 6y ago

Hardware based wallets kept offline until needed I suppose. Makes me wonder where banks keep their money...

conanbatt 6y ago

There are special services by Coinbase and other brokers alike for this.

londons_explore 6y ago
If such a service loses your coins, you could sue the service. But the service will likely be bankrupt. I assume nobody would want to insure such a large and unknown risk...
- conanbatt 6y ago
  The funny reveal about bitcoin is that it is literally impossible to have a 100% safe way to store them. If you have them, you could lose them, if someone el se has them, they can be stolen, etc etc. But these services are no joke. Xapo had repurposed a former military base in the middle of the swiss alps, with special vaults and security procedures. I'm talking about tens of millions spent in resources and human ingenuity to keep this safe.
  - alwillis 6y ago
    The funny reveal about bitcoin is that it is literally impossible to have a 100% safe way to store them. This isn't accurate. The gold standard for bitcoin is using multisig, where multiple (m of n) keys are required to access the bitcoin. For example, anyone can setup a 3 of 5 multisig which requires 3 of the 5 keys to spend or move the bitcoin. These keys would be stored in separate hardware wallets stored in vaults anywhere in the world. In the case of MicroStrategy, one could imagine them using multisig, so that if Michael Saylor dies in a tragic boating accident, board members of his company would be able to access the bitcoin the company owns. Multisig has been available almost since the beginning of bitcoin but only recently became more mainstream as the value of bitcoin continues to increase. [1] https://en.bitcoin.it/wiki/Multisignature https://en.bitcoin.it/wiki/Multisignature [2] 10x Security Bitcoin Guide—https://btcguide.github.io https://btcguide.github.io
    - conanbatt 6y ago
      > These keys would be stored in separate hardware wallets stored in vaults anywhere in the world. Nothing is 100% safe. If 3 of those locations are compromised the bitcoins would be lost permanently. Also its a very inaccessible way to store bitcoin, and not scalable for all use cases.
      - alwillis 6y ago
        Also its a very inaccessible way to store bitcoin, and not scalable for all use cases. It depends on how much money someone is holding. It's certain more secure than a single password on a banking site and your mother's maiden name. Multisig allows for a possible catastrophic incident to occur—a fishing attack, a security vulnerability with your bitcoin wallet, loosing your pin, etc—and not lose your money. A 2 of 3 multisig is something tech savvy people could easily do with a hardware wallet, a smartphone or computer and a safe deposit box, for example. If you're a multinational corporation with over a $1 billion in bitcoin like MicroStrategy, it may make sense to have keys in different parts of the country or in different countries, especially if your adversaries are state level actors.
- alwillis 6y ago
  I assume nobody would want to insure such a large and unknown risk... You're kidding, right? With billionaires, publicly traded corporations, hedge funds and insurance companies investing in bitcoin (or using it as their treasury), there's a whole new crypto financial industry emerging. For example, Knox: https://www.knoxcustody.com https://www.knoxcustody.com Bitcoin custody that is insured to the full value of holdings for the risk of theft and loss, including collusion.

Proven 6y ago

They are morons for buying Bitcoin like they did, but they'd be even bigger morons if they actually tried to use Bitcoin by themselves (like these other commenters suggest). If they have any brains left, they outsourced that.

zaptheimpaler 6y ago

Offline wallets plus a private security team should be justifiable given how much is at stake. The physical security aspect would actually be not so expensive since a small room could store all the bitcoin in the world.