Numerous investors are storing their Bitcoin in underground vaults all over the world to prevent the assets from being stolen. This appears to be the most hardcore “hodling” ever recorded.
A company based in Hong Kong – Xapo – provides Bitcoin wallets and cold storage services. The company holds nearly $10 billion worth of Bitcoin in its vaults, Bloomberg states.
Taking a look at the numbers, it’s about 6% of the current market cap of Bitcoin, and it belongs to a single entity. This makes Xapo one of the biggest crypto storage services in the world.
According to Xapo, their clients have the opportunity to stash their Bitcoin bags in vaults whose locations are not specified. The vaults are located across three different continents. Biometric locks and armed guards are in place too. In these vaults, a private key to a customer’s wallet is stored. The private key is given to the person when their identity is confirmed.
Compared to this extreme “cold wallet”, regular wallets become less attractive to investors. Simple, exchange wallets offer storage of coins for trading, but they are lacking in the security department. Numerous cryptocurrency exchanges have lost investments to hackers, including Mt. Gox, Bitfinex, Poloniex, Bitstamp, and Bitfloor.
Online wallets are considered to be safer, but even they are susceptible to phishing attacks.
Hardware wallets are popular because of their security, but on March 15, a 15-year-old found a loophole in a Ledger Nano S and managed to enter the wallet without a private key.
Xapo’s extreme approach to holding cryptocurrency comes with downsides too. It takes around 48hours to 4 days to withdraw Bitcoin from their vaults to a wallet. The vault could be compared to those that store gold or other valuables. Frequent crypto users and day traders will find Xapo’s services really unattractive.
While this might be the most secure solution to store cryptocurrency, the time, and costs of this service is overwhelming. The cryptocurrency space needs a better solution to deal with phishing attacks, wallet hacks, and general education.