BUY BITCOIN
Meet Wences Casares, the Argentine entrepreneur who has spent the past several years convincing Silicon Valley’s wealthiest investors that Bitcoin, and only Bitcoin, is the global currency of the future.
His startup, Xapo, has built a network of underground cold storage vaults across five continents, specifically designed to safeguard and protect large sums of the digital coin.
How Much Bitcoin Does Xapo Hold?
The company boasts some massive holdings. According to two clients, Xapo houses roughly $10 billion of Bitcoin. Another investor close to the venture, who spoke with Bloomberg, calls that figure an accurate approximation. The cache is remarkable as it amounts to about 7% of the global Bitcoin supply. This means that Xapo, a company only four years old, holds more ‘deposits’ than 98% of the roughly 5,670 banks in the U.S..
The large Bitcoin holdings at Xapo underscore the faith that Casares — an entrepreneur nicknamed ‘Patient Zero’ for helping bring the coin to Silicon Valley — has garnered among his peers and clients at major cryptocurrency investment firms like Grayscale and CoinShares.
“Everyone who isn’t keeping keys themselves is keeping them with Xapo,” said Ryan Radloff of CoinShares, which has more than $500 million of Bitcoin stored at Xapo. “You couldn’t pay me to keep it with a bank.”
Xapo’s billionaire backers include LinkedIn Corp. co-founder Reid Hoffman and former Wall Street trader Mike Novogratz, who just today launched the Bloomberg Galaxy Crypto Index (BGCI), designed to track the performance of the 10 largest and most liquid digital currencies.
Bitcoin’s astonishing rise in recent years has seen the development of thousands of rival cryptocurrencies, the biggest ones by market cap being Ethereum and Ripple. What’s interesting is that, despite the relative success of these other coins, Xapo only safeguards Bitcoin because of Casares’s belief that it alone will succeed. Because of this hardline stance, Xapo routinely turns away customers looking to store other cryptocurrencies.
How Does Xapo Safeguard Its Holdings?
Xapo’s solution to protect its massive amounts of Bitcoin is to bury cold storage devices in heavily-protected areas like mountainsides and decommissioned military bunkers, and pair these with layers of electronic safeguards.
The company has a well tested protocol in place to protect customer’s digital assets. Xapo requires a thorough verification of a client’s identity and an authentication of the request before it will manually sign the transactions with private keys from multiple vault locations. Approval from three separate vaults is required for any transaction to be authorized. As an added safeguard, the entire process of retrieving one’s Bitcoin from the vault takes about two days.
“Every part of their DNA is geared to security,” said Sean Clark, founder of First Block, who noted the vault’s fingerprint scanners were equipped with a pulse reader to prevent amputated hands from being used. “Whenever we make big transfers they FaceTime us, we have duress words, if it’s big enough they’ll fly out to see us.”
Featured image from Shutterstock.
