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According to recent reports, Coinbase has a whopping 966,230 Bitcoin in its cold wallet. The exchange is increasingly becoming like a ‘bank’ which stores a growing number of deposited cryptocurrency assets.

How much cryptocurrency does each exchange hold in its cold wallet? With Coinbase leading the world in being the largest firm by crypto-assets, the numbers will probably shock you.

Read more for the full news (https://beincrypto.com/coinbase-holds-a-whopping-966230-bitcoin-7b-in-cold-wallet/?utm_campaign=amba&utm_medium=social&utm_source=bitcointalk&utm_content=jc)

This is freaking enormous for Coinbase to hold a lot of Bitcoin in their own cold wallet. Speaking of cold wallet, IDAX's CEO just simply "ran away" with the exchange's cold wallet with a lot of amount on it.

I'm not saying that reputable platforms like Coinbase might gonna do the same in the near future. It's just that these platforms needs to take care of their customers and always think of their hard-earned money when trading or storing Bitcoin and other cryptocurrencies.

I just hope that their cold wallet would remain in safe hands.

It looks like Coinbase have a good system to secure bitcoins in cold wallets. Just have a look at this, https://www.ccn.com/coinbase-brian-armstrong-crypto-bitcoin-wallet/

I quote - " “A well-designed crypto custody solution doesn’t rely on any single person. Instead, it utilizes multiple keys to achieve consensus

 and redundancy. The larger the transaction, the more parties need to consent. This is really just scratching the surface of a well-designed custody

solution.”

Also, “Air gapping” your private keys in cold storage means fully disconnecting them from the internet, such that a remote attacker can’t access

them without some physical attack as well. This additional manual step introduces a nice guarantee that it is not just software protecting your

money. <--- So they know how to do proper "Air gapping" when they transfer coins from hot to cold storage.  ;)

Coinbase are also insuring their hot wallets, so your losses on a successful hack on Coinbase, should be covered by the insurance.  ;)

From the analysis of Kprawn on Coinbase cold wallet and its mutisignature, it will be impossible for just one nothing CEO who is feeling good to just run away with the private key, since this requires a consensus. I really don't know why people will leave fund in an exchange with sole private key holder. This is dangerous and any stupid CEO with such power can pull the trigger when he feels good.

It's equally very important to have much of our fund on non-custodian wallet so we can be in-charge of our wallets.

This is not news. Coinbase admitted last year after their planned cold storage upgrade that they were holding 5% of all BTC, which would be ~1.05 million. You can read their blog post here: https://blog.coinbase.com/a-behind-the-scenes-look-at-the-biggest-and-quietest-crypto-transfer-on-record-682ff4a6d9e4.

Knowing how to properly set up and use an air gapped wallet is cold storage 101.

Coinbase are claiming they have insured their wallets. As far as I know, this has never been proven nor tested. Please CMIIW.

We don't know that. You are trusting Coinbase on their word here. There are plenty of exchanges, web wallets, services, ICOs, altcoins, you name it, that people have trusted and eventually been scammed.

It doesn't matter how "big" or "reputable" the entity holding your keys is. Not your keys, not your bitcoin.

I have never trusted and will not trust Armstrong`s exchange and exchanges like Coinbase. Holding in cold wallets can testify about possible security holes, about wash trading, about money manipulations. It is very sad

It's nice to see use multi-sig, especially with the cases of people emptying the cold fund wallet and then running away, I would assume that their cold wallet is rarely used, and requires a minimum of 3 signatures (from c-suite employees?).

Also, what's the point in storing so much BTC? Wouldn't it be smarter to liquidate at least a portion of it? I wouldn't risk that much money with my business personally, but I understand it from their side.

Air gapping is really good. Haven't seen a lot of companies use it due to complexity, especially when you actually need to send transactions from it as well

Because it's not their bitcoin. These are customer deposits and holdings which the customers are trusting Coinbase to hold on their behalf. If they sold for fiat, and then bitcoin went on a bull run, they wouldn't then be able to buy back enough to honor their customers' deposits and would become insolvent.

It's still dangerous because it's centralization that puts whole network at risk. Coinbase is still one entity and it makes it vulnerable. They can use cold storage but there's always the human factor. People are greedy and they make mistakes. What will we do if 7B gets compromised because of one person?

If what coinbase is showing on their site more than 70% of their users buy bitcoin so this storage is going to keep growing.

It is really hard to trust a person nowadays with that kind of amount. Maybe within their system, not only one person has the authority to touch that huge amount of holdings. They have contingencies if something unusual happens. But the problem is, if there will be connivance among those trusted authorities. So it only suggests that if you are a bitcoin holder, it is better to store it in your own bitcoin core wallet and not in the exchange. At least you are contented that if any hacking incident or inside job happens, your coins are safe with you.

Yeah, there's less risk that Coinbase will commit an exit scam, but there's a ton of other risks - they might freeze accounts at requests of government officials, they can do the same if they will like the account is suspicious - they already do so with coins that come from gambling sites, and they can easily expand this black list. Coinbase can decide to support a fork chain and not give you your original coins - something that could have happened during the Segwit2x drama.

Keeping your coins on exchange only makes sense if you trade on a daily basis.

that's very big maybe a lot of hackers who want money from coinbase, I hope coinbase maintains security well until later, trust is more expensive from users hopefully not misused like a hacked exchange, as if they never thought about security about user money and misappropriating user funds, I also still keep some stellar in a coinbase wallet and I hope it stays safe there on their cold wallet

I believe that right now after the recent debacles involving IDAX and QuadrigaCX, the people behind Coinbase are really careful not to be experiencing the same fate. In my view, Coinbase is quite reputable and is not risking anything of its business by being negligent and failing to be pro-active. Coinbase well understood the kind of responsibility they have on theirs shoulders.

Still, because this is also another centralized organizations, users should really be concerned and maybe always demanding a high level of transparency from the Coinbase management. Anyway, what is so clear to us is that whether a platform is centralized or decentralized if the people behind it are really not that good and are not honest then eventually the business will fail or just evaporate into thin air.

So withdraw it to your own wallet. Aren't withdrawals free?

Mt. Gox was reputable, until they scammed all their customers. Bitfinex was reputable, until it emerged they printed Tether out of thin air to save themselves from insolvency. Thinking that being reputable means your funds are safe is the same line of thinking as "too big to fail", and we've seen time and time again in bitcoin and in fiat that this is a dangerous way of thinking. Storing your coins with any third party is risky, regardless of how reputable you think they may be.

Like when they sold users' data to third parties without their knowledge or consent? Or when they partnered with Hacking Team who develop surveillance and spying software for totalitarian governments? Or when they listed a bunch of altcoins that their shareholders told them to so they could dump their bags? Coinbase are about as transparent as a brick wall.

Coinbase has been in the game for seven years and counting. They have acquired the trust between people and cryptocurrency and what helped them achieve that is being early In the game. Because of this post, I was amazed at how they acquired different investments that led to acquiring different companies and partnering with various companies to help them with their goals. With only that, I think you could say that they are one of the best in the business.

Going to your opinion, being hacked is always going to be a problem because they won't know when it's going to happen, they should be aware that it could. Last August, there was an attempted hacking, but they were prepared. So I think by far, they are one of the best.

It's not surprising to know that there are huge number of people who trust coinbase. Coinbase is a really well established wallet service for bitcoin and also a way to exchange bitcoins to fiat instantly so its just normal for them to have this huge amount of bitcoin. I think blockchain wallet also holds tons of bitcoin because they are the 2 big names in this kind of industry.

People are stupid. They've been told over and over about the dangers of trusting a third party with their coins. They have the example of Mt gox, mintpal, upbit and numerous other hacks and losses.

And still they keep their coins online because they're too lazy to set up their own wallets. (Though I concede that the size of the blockchain is now a problem if you haven't got a lot of memory in your computer).

It is but so was MtGox. Exchanges have a tendency to grow and gain trust with each year but then it all goes down the drain when they get hacked or somebody leaks information. I don't like Coinbase because of their full cooperation with all agencies and KYC requirements. Who knows where their KYC information will end up one day.
The money can be quite safe there but even they don't have an insurance fund that would be able to cover even $1B.

The size of the blockchain is not that relevant to storing your coins securely. You can set up your own wallet by downloading, verifying and running a simple wallet such as Electrum, which has a size of 10 - 50MB depending on the version you install. Better than that, you can use a hardware wallet which also requires minimal downloading/memory, or a paper wallet which potentially requires none at all. All of these options are miles ahead of using a web wallet or exchange wallet.

You only need to download the blockchain if you want to run a full node, which although does add security in that you do not have to trust any third parties to verify transactions, does not add any security in terms of keeping your private keys safe.

I think that people who are serious about Bitcoin storing can afford a decent computer to install a truly secure wallet.

You don't need a decent computer. You can run a fully air gapped cold wallet on any old desktop or laptop you have lying about. You can do it on a raspberry pi for 30 bucks. You can buy a Ledger or a Trezor hardware wallet for 50 bucks. Even something like the Electrum mobile app is better than trusting an exchange. All this talk about needing good computers which have enough memory to download the entire blockchain is nonsense.

Coinbase Dominates The Market
Coinbase is recognized for being one of the crypto exchanges with a very user-friendly interface and large liquidity.

This time, the exchange shows it holds 4.6% of the total Bitcoin supply that could ever be mined.

The funds the company holds in its cryptocurrency cold wallet are the reserves that the exchange has in case users want to withdraw their funds.

It is worth mentioning that not all this amount of money is owned by Coinbase. These funds are the ones that the exchange holds on behalf of the users that are trading on the platform.

Coinbase provides custody to users. Individuals are not able to hold their private keys while using the Coinbase platform.

The funds Coinbase is currently handling are equal to $7.91 billion.

The data provided by BitUniverse shows that Coinbase is ahead of other competitors. Indeed, the next top 5 exchanges would have to combine all their funds if they want to hold more BTC than Coinbase.

BitMex is the second exchange with the largest number of BTC held. They have 265,140 BTC, worth $1.97 billion.

Other exchanges include Bitstamp with 229,490 BTC, Bitfinex with 146,120 BTC and Kraken with 136,780 BTC. These funds are valued at $1.71 billion, $1.54 billion and $1.4 billion.

Several exchanges have been accused of having fake volumes. This allows companies to attract a larger number of users considering many would prefer to trade in a platform with large liquidity.

Despite having the largest funds held in cold storage, Coinbase didn’t register the largest trading volume in 24 hours.

BitMex handled $2.49 billion on the first day of December, followed by Coinbase with $118.65 million and Kraken with $86.37 million.

BitMex provides users with the possibility to trade with leverage up to 100x. Coinbase is known as the user-friendly exchange, while the other platforms have different features and solutions to distinguish themselves from competitors.

Exchanges must be very careful with how they handle their funds considering hackers could be targetting these platforms and try stealing some funds.

Coinbase is also known for having very secure security solutions that were never publicly vulnerated by an attacker. Other platforms were hacked in the past and many of them had to stop operating.

 Read more at: https://coinspace.com/news/exchanges/coinbase-holds-over-966-million-bitcoin-its-cold-wallets

How did they get that number in the first place? Is it from transaction fees or there are a lot of people who keep their assets on Coinbase? It's hard to believe for me.

Well, hopefully, it won't get hacked. The market will suffer like hell if all of those get dumped.

$7B worth of bitcoins is just too much for any exchange to hold. It's risky for them as well as their customers. These days, exchanges are getting hacked like it's a piece of cake for the hackers.
What if these funds are stolen by a hacker or the exchange scams it's customers just like Mt. Gox.
I just hope that their customers don't hold more amount of crypto in Coinbase. It's risky for them to hold crypto in Coinbase when knowing the numbers are public now and the exchange is more prone to getting hacked.

Mostly other people storing their assets, but a bit of their own profits as well.

Coinbase state that they have 30 million users. 966,230 BTC works out as only 0.032 BTC per user. Not that hard to believe, especially when you consider there are several users trading hundreds or even thousands of bitcoin on Coinbase. Additionally, with Coinbase taking anywhere between 0.05% and 0.5% from both makers and takers, that works out as 0.1% to 1% of profit on a daily volume of over $55 million for BTC markets alone, giving them a profit of probably somewhere around 50 BTC every day just in trading fees from BTC markets.

There isn't enough liquidity to dump 1 million BTC on the market at once. Anyone who is smart enough to be able to hack Coinbase's cold wallets is smart enough to realize that, and would likely just trickle the funds in slowly. The converse to that is that as soon as news broke that 1 million BTC had been hacked, loads of people would panic sell and the market would dump anyway.

And with this news, maybe Coinbase will also be the prime target for hackers, because it just attract those cyber criminals to step up their game.


Not your keys, not your coins, simply as that. If you understand that then you won't leave huge funds in Coinbase or at least any exchange for that matter.

Similar thread here: https://bitcointalk.org/index.php?topic=5206249.0

Although this seems to be more appropriate in Bitcoin Discussion. It's true that risks can be found in such a way of handling funds. If the wallet holder decides to get it all though, it would be a lot of risk to him/her since his/her identity is known already, unless the private keys are "stolen" (as they might say), in which case solid evidence must prove the theft. And it would be hard for the thief to get it in cash/fiat because the address used to steal such amount would be closely monitored for transactions, as the blockchain is transparent.

I'm not too worried about Coinbase getting hacked. They don't seem to have been hacked as far as we know and they only keep 2% of their holdings in hot wallets for people to withdraw conveniently.

2% of nearly 1 million is still a lot, but I'm pretty sure that Coinbase has enough security measures in place to block suspicious withdrawals, especially when they are unusually large.... something other exchanges can learn from.

It doesnt matter safe or not, it should NOT happen, ever.
Its too much BTC in one place, it should be decentralized.
Worst case here is that its people bitcoins that they just don'y withdraw and they SHOULD.
Imagine someone would hack 966000 bitcoins now... it would CRASH price and trust in bitcoin for looong time.

It's likely that many users just leave a small amount on Coinbase, including both BTC and fiat, so they can do some trading. Coinbase isn't really a bid/ask type of exchange though, unless this number also includes Coinbase Pro, which is the real exchange.

The source is bituniverse
Linking the image (https://i.imgur.com/vMdlYRN.jpg) as it's a weird format size.

What I can't wait for is the release of data for other exchanges, they say they will publish the data on the 12th.
I'm sure we're going to have a lot of surprises.
Bitstamp is doing less than 0.1% of the global volume but is holding 1.25% of the total number of bitcoins (including satoshi's)
Also bitmex is holding 10% more than bitstamp but is doing 40x times the volume.

Grabbing some popcorn!!!

What do you mean by "including satoshi's?"


I suspect that a huge number of people use Coinbase as wallet -- same as Mt. Gox back in the day. I assume the numbers here include Coinbase Pro since their wallets are associated.

They hold 1.25% of the total coins mined till now, including the coins that have never been moved like the ones attributed to satoshi.
I was trying to suggest that the percentage is a bit higher if we cut the numbers down to 16-15 mils coins that are not lost or locked forever.
On the other hand volume clearly is done with coins that can be moved (or fake bots)  :D

LE, to combine replies:


Yeah but this is the part of the math I was talking.

They have 0.1% of the volume, that volume is made with coins that we suppose been moved in the last 12 months.
On the other hand, they have 1.25% of the total coins including the ones that might be lost forever.
So if after 12th December when the next numbers are published and we find out that all the exchange held about 50% percent of all the coins even mined, the number will grow in Bitstamp's favor.
They would still be doing 0.1% of the volume but (in this scenario) they would hold 2.5% of all the coins held by exchanges!

Anyhow I assume there will be some long faces when exchanges claiming billions in trade would be uncovered with 200 BTC in cold wallets.

The problem with not including suspected coins that are lost or locked forever is we don't know for sure if they are. We know a certain amount is lost forever due to certain qualities or it was sent to burn addresses or something like that, and that's only less than a few thousand provably lost.

The rest are still unknown and will remain unknown. Coins that haven't moved in 5 to 7 years can still be owned by the same people and still have access to them, merely not just moving them or spending them.

Loads of people keep their assets on Coinbase. It's because the bitcoin blockchain is now so large, people who just access the net via their phones prefer to use an online wallet, rather than set up their own wallet on a dedicated laptop.

I just hope Coinbase have good security installed.