Bitcoin surge creates storage fears as users take extreme measures

By C. Edward Kelso - October 20, 2017 (news.bitcoin.com)

Bitcoin millionaires are now a thing, and so are thousandaires. It’s been a good, good year for users of the world’s most popular cryptocurrency. With sums exceeding expectations by a lot, problems arise. Keeping it all on a smartphone no longer seems reasonable. Exchanges prove insolvent. And so storage has become an obsession, leading to interesting extremes and hardware innovations. 

Swiss Mountain Storage

“This is not a race. It is a chess game, Xapo’s head of security, Carlos Rienzi, warns. “You have to think about the opponent’s next movement. You can never relax.”

Xapo was born ultimately from its founder’s trials in his native Argentina. Known as its Great Depression, it lasted half a decade, decimating peso holders, wiping out savings. CEO Wences Casares’ home country contracted nearly thirty percent; poverty and indigence rates combined to include seventyfive percent of its population.

He would later explain finding bitcoin to be something of a revelation, and a potential answer to persistent emerging economic regions’ plights.

Bitcoin keys in a Swiss Mountain

Billed as combining “the convenience of an everyday bitcoin wallet with the security of a deep cold storage,” Xapo has since grown to include former Secretary of the US Treasury Lawrence Summers as an Advisor.

Demand for services caused it to contract with Deltalis, giving the phrase “deep cold storage” literal meaning. Its facility is in the birthplace of Switzerland’s independence, the canton Uri — inside a mountain, to be exact.

“Where the Swiss military built one of its primary command and control centers, Deltalis has found optimum levels in security and stability,” company press notes. The 10,000m2 mountain spot is “further enhanced with a multilayer security concept, full redundancy and a strong IP and IX connectivity from international carriers.”

Joon Ian Wong, Quartz technology reporter, gives a sprawling account of lengths newly minted bitcoin millionaires will go to keep their holdings free from tamper.

Xapo’s Deltalis wing has “two more portals inside the suite: the first leads to an operators’ room, and the second to a “cold room.” The cold room is encircled with steel slabs to form a Faraday cage: a barrier that protects against a possible electromagnetic pulse (EMP) attack that could wipe out the data—and thus the keys to the bitcoin—stored in the room.”

news.Bitcoin.com Staff’s Cold Storage Choices

Readers might not be in dire need of Swiss mountain cold storage, however.

In no way endorsements nor recommendations, news.Bitcoin.com asked a few staff members how they’re navigating bitcoin’s increased value of late.

All mentioned they keep slight access to funds on their smartphones. One staffer elaborated, “I like iOS, because it is end to end encrypted and Apple analyzes apps before approving them.” When asked about fully encrypted phones such as Blackphone 2 by Silent Circle, “Yeah that’s extreme. Maybe if you’re a bitcoin millionaire.”

As for cold storage, offline proper, “I like my Trezor but Trezor 2 is coming out soon,” a staffer mentioned. “Ledger is good and [less expensive].”

Another staffer jumped in, agreeing, “I love my Ledger Wallet Nano S. It is awesome. I have used it for a year without any problems and it [allows] you to store a variety of altcoins as well. I bought my wife the Keepkey, because Shapeshift has just been integrated into it, and it is aesthetically pleasing. It is great.”

Images courtesy of: Pinterest, Deltalis, Silent Circle. 

C. Edward Kelso - C. Edward Kelso is a long-time fintech journalist, passionately covering the cryptocurrency space since 2014. Contact: (Nine Two Nine) 367-1848.