Bitcoin might be a virtual currency, but when you’ve amassed over millions of dollars worth of it, you will still need concrete vaults to keep your stash safe. Understanding the need for security, Xapo provides Bitcoin millionaire with just what they need – a network of maximum security underground vault featuring blast doors, fortified concrete and encrypted computer servers.
Over the past decade, Wences Casares, a serial entrepreneur from Argentina, has been at the forefront of the Bitcoin footrace. By convincing millionaires and billionaires in Silicon Valley that Bitcoin is currency of the future and that he’ll provide the services to keep them safe, Casares managed to gather enough funds (and trust) to construct a network of underground vaults spanning across five continents – one of them being a decommissioned military bunker in Switzerland.
Billionaire Backers
Among Xapo’s clients is Ryan Radloff, who stores over $500 million worth of Bitcoin in Xapo’s underground vaults. Radloff, who is also the CEO of CoinShares – one of the biggest crypto investment firms in the U.K – expressed his lack of confidence in conventional financial institutions like banks to store cryptocurrencies.
“Everyone who isn’t keeping keys themselves is keeping them with Xapo. You couldn’t pay me to keep it with a bank.”
you couldn't pay me to keep #bitcoin with a bank right now… @xapo @coinsharesco https://t.co/u5p5TR3li1 via @technology
— Ryan BRRRRadloff (@RyanRadloff) May 9, 2018
Xapo’s other billionaire backers include LinkedIn co-founder Reid Hoffman and former Wall Street magnate Mike Novogratz. According to them, since Bitcoin is here to stay, so will its biggest nemesis – theft. Therefore, to ensure maximum security for their treasure, they chose Xapo for its holistic complexity – it’s better safe than sorry.
How is Bitcoin Stored
The simplest but also one of the most secure ways of storing Bitcoin would be to write down your private key on a piece of paper and hide it somewhere safe. Private keys are basically like the password to your bank account; if thieves manage to steal your private keys, they can withdraw your holdings into their account in the blink of an eye, in a process that is irreversible.
In light of that most investors tend to keep their private keys in a cold storage – an offline device such as a thumb drive. However, hackers are getting smarter and smarter as they are able to develop Trojan horses that hijack the offline device once it comes online – such as whenever you plug it into a computer.
To prevent that from happening, Xapo buries the cold storage that contains the private keys deep underground, with electronic safeguards in place to prevent people from hacking into the devices with EMPs or other methods.
With approximately $10 billion in cold storage, Xapo currently holds about 7% of the global Bitcoin supply.