Over the last many years, Wences Casares he has been trying to persuade investors and millionaires of Silicon Valley to take Bitcoin seriously, and invest in the global currency of the future. The Argentinian business leader has built a startup, Xapo, with a network of underground vaults and cold storage facility across five continents.
According to a report by Bloomberg, Xapo has a list of clients studded with family offices, and for security reasons, occasionally letting a journalist peek into a stronghold. However, recently one secret has been unfolded – how much digital coins these underground vaults have stored.
Company’s two clients and another person close to the venture has disclosed that it has roughly $10 billion of Bitcoin stored in it wallets.
While we cannot be sure about the exact amount, since Bitcoin price fluctuates very often, the amount is equivalent to 7% of the total global supply of the digital currency. Bloomberg in its report on May 9, has cited credible sources “close to” the vaults, who called the figure an “accurate approximation.”
Xapo has been in the market since 2014, and it has been making headlines for a number of reasons. It converted a Swiss army bunker to a Bitcoin storage facility late last year. Prior to that, the company had issues with regulators during a move to the country from the US. The startup is backed by billionaires including LinkedIn co-founder Reid Hoffman and former Wall Street trader Mike Novogratz, who aims to set up his own cryptocurrency merchant bank.
These millionaires are certain about the future of Bitcoin and believe the currency is here to say. However, they have a very big concern – theft. We have seen a number of reports where crypto-wallets and exchanges were compromised, and hackers stole millions. To counter this growing concern, companies and exchanges introduced the concept of cold storage – a facility that is not connected to the internet and has lesser exposure to hacking.
Investors and cryptocurrency funds praise the cold storage concept, despite the arguable lack of complete control and more centralized setup. They work more like a bank where buyers can store their currency – and have private keys to access those. Xapo works on the same concept and offers cold and secure storage facility to clients across 5 continents. This overwhelming demand for cold storage places the company above 98% of the US banks in terms of deposits.
The process to access your wallet at Xapo is very secure and a little complicated. If a client aspires to retrieve Bitcoin from the vault, it takes about two days as the company verifies the client’s identity and authenticates the access request before manually signing the transaction with private keys. If the client has to make a transaction, he/she needs to get approval from three separate vaults, in order to authorize. Xapo also offers a trading desk for buyers and sellers of Bitcoin – and also issued the first Bitcoin debit card to spend it.