How Whales Store Their BTC

[darewaller]

Cold wallet is something that people do all the time. That would be pretty hard to hack since it's offline, not impossible but as close to impossible as it gets. Which means that they are spending a good chunk of their time on making sure that they do not have too much on their hot wallets, and have enough on their cold wallets that make sure that they are protected.

So, for example if you are Binance, you put enough on hot wallet that you personally own, if you could possibly make that happen that means even if it gets hacked everyone else's money is always protected. This is why I believe that cold wallet is their solution and offline storing is the way to go when you are too rich.

[m2017]

Last time I heard about the way a 'whale' was holding Bitcoin or anything secure is when Binance's Zhao showed that USB stick on Twitter.  While normally it should be the more money you hold the more security you should invest in, I doubt all whales care that much and Zhao proved it.  

From the highlighted sentence in the text, it turns out that whales should store their crypto in a titanium safe, and the safe in an underground bunker under a mountain with protection? I expected someone from whales to share his personal way here, at least incognito, but it looks like my expectations will be in vain.

My guess is, many of them keep their money on Hardware Wallets and a few of them maybe on some old laptop on Electrum or Core.  I bet only a very select few have airgapped computers and all of that.

Most likely (even you are talking about it) whales use the same methods of bitcoin storage as all other crypto investors.

We can only speculate on this topic, and none of whales needs to reveal the secrets of storing his multimillion-dollar wealth.

[JayTrain]

most likely, such amounts are stored in large exchanges under certain agreements and security guarantees, for example, the Winklevoss twins store their keys to wallets in different US cities in bank cells so that attackers cannot find, in general, there are enough ways.

[darkangel11]

Depends on how much money you're storing.
1 billion?

For that kind of money I wouldn't be surprised if they had a specially designed computer that doesn't use typical branded components but is military grade. For those of you who don't know what that means, military grade components are made robust, with thicker boards, all components covered in a layer of insulation that protects it from moisture and put in durable shock protecting cases, so that a soldier can use a laptop in the rain, or in a sandstorm. If I were to store a billion dollars I'd order one of those.

[nullius]

Obviously they keep very secure wallets. They could even keep a decentralized version of the seed phrase with different, trusted individuals. So that every trustee has one word exactly and nobody knows who the trustees are except for a select few.

Dividing up a seed phrase that way is not secure.  Each word of the seed that you leak exponentially decreases security.  An attacker who recovers a large enough proportion of shares, but not the whole thing, will be able to bruteforce the rest of the seed.  Furthermore, there is no way to provide redundancy, or to specify M/N access policies.

A popular approach to try to solve that is Shamir’s Secret Sharing.  In M/N Secret Sharing, an attacker who obtains M-1 shares has no information about the seed.  That has had some horribly buggy implementations, and it has been criticized generally by some experts (notably, Greg Maxwell).  I do NOT recommend using it, unless you know exactly what you are doing; but I disagree with the general criticism.  It needs better implementations, better standards (such as the Satoshi Labs protocol for this), and application to use cases where it makes sense—not ridiculous use cases, where it is too often misapplied.  Reconstruction of the key is potentially a major problem for the use case stated in OP; therefore, it may not make sense at all here, depending on the circumstance.  I note that there exists some enterprise software using SSS to secure the keys for corporate secrets; most Bitcoiners have no idea about that, and it is not a Bitcoin thing.

Multisignature, as I suggested in my prior post, accomplishes the same objective for the use case addressed in OP.  With Taproot, a M/N multisig (and many other access control conditions) can be made indistinguishable on-chain from ordinary spends; this obviates any blockchain privacy and distinguishability concerns, one of my own general objections to multisig.

Yeah obviously you should use multisignature for the encryption of each word in order to keep the naked text away third party eyes.

Cringe.  Conflating signatures (authentication) with encryption (confidentiality) is such a basic error that I am not sure if you may be trolling me Slashdot-style, making a ridiculous statement to attempt wasting my time with a long, detailed correction.

Unfortunately, clueless newbies who may somehow imagine that multisignature could “encrypt” (!) seed phrase words (!!) are the same clueless newbies who would attempt naïvely, linearly dividing up the words of a seed phrase—as you originally suggested, and you continue suggesting.  Suffice it to say:  You are unqualified to give security advice.  Stop giving bad security advice.

But would you then not have the same problem except that you went from storing the seed phrase words to storing the private keys to the seed phrase words? I guess you can divide up the keys and keep on adding multisig layers for extra security but it would never be 100% secure. Just more distributed. Also what I meant by "decentralized version" but was too lazy to explain.

Quoted for the lulz.

However now wouldn't the problem be that the more layers you add, the greater the chance becomes that you could lose access to the wallet by losing access to a signature? So thats a problem I think most corporations/whales would rather avoid. The scary thought would be someone withholding a key to blackmail or sabotage a business from within, with their own funds.

No matter how I think about it, there's a huge flaw in security.

I added highlighting to the internal quote above, for a reason.  The problem that you state is well-known and completely obvious.  The solution is that “M/N” thing:  Any M signatures out of a set of size N can authorize a spend.  Say, a 3-of-5 signature, or a 7-of-11 signature.  IIRC, some high-value escrow deals on this forum have used something like 2-of-3 or 3-of-4 multisignature with multiple high-trust escrow agents.

(2-of-3 multisignature also allows coöperative close of an escrow deal:  If Alice and Bob both acknowledge that the deal is properly completed, they send the money as agreed.  In case of a dispute, the escrow agent—effectually here, an arbiter—can sign together with Alice to send the money to Alice, or sign together with Bob to send the money to Bob.)

For dividing up secrets, a very different approach than multisignature, Secret Sharing also does M/N.  But it has many sharp edges, footguns, and bad implementations.  I disagree with gmaxwell’s categorical condemnation of Secret Sharing; but as things stand with implementations, I will not recommend it to anyone who is not a security expert with an appropriate use case.  Just use multisignature instead.

[livingfree]

I've watched a video that a crypto company in Japan keeps their most bitcoins/crypto into a hardware wallet. It's safe and it has glass covers and only a few executives has direct access on it.

I can't remember the name of that company but it was an exchange.

I think that there's really no difference on how an individual bitcoin investor keeps his bitcoins safe on a hardware wallet and the same as the enterprises.

[coolcoinz]

I've watched a video that a crypto company in Japan keeps their most bitcoins/crypto into a hardware wallet. It's safe and it has glass covers and only a few executives has direct access on it.

I can't remember the name of that company but it was an exchange.

I think that there's really no difference on how an individual bitcoin investor keeps his bitcoins safe on a hardware wallet and the same as the enterprises.

In the era of MtGox nobody knew about air gapped machines or hardware wallets. They had it all on bitcoin core wallets and we know how it went from there. At least the hookers that Karpeles was paying for were happy with the money they were making.

Most whales need fast access to their money so I'd expect them to hold it at home with keys on some engraved metal plate so it can't be destroyed in a fire. That's what I'd do. A wallet can be made small enough for you to hide it anywhere like in the floors or behind a lose tile in the kitchen. I have my coins on a hard drive in a fireproof safe. Even if someone manages to steal that I'll have backups hidden in a safe place that will allow me to access and move the funds before anybody can crack the password. The more money you have the more security you need.

[BITCOIN4X]

I think of hardware wallet that support multi signature as the best option for whales to securely store their bitcoin. Hardware wallet are ideal for storing large amounts of bitcoin, but either way I don't think they will keep them in one basket. Every user who invests in bitcoin be it small or big then it is they who are responsible who must follow best practices to secure their wallet. I think the whales know how they do it too, and I believe they are still better than most non-technical Legendary like me when it comes to their bitcoin storage.

If we have 1-2 hardware wallets, it's probably 10-100 hardware wallets for them, but who knows if they may also consider a centralized storage service.

[goldkingcoiner]

~autistic screeching

I confused the word multikey with multisignature and used the wrong word synonymously. Don't be an ass.

I was pointing out that even if you were to use multisig, no matter how complex, you would have the same problem at the endpoints as with multikey encryption of the actual seed phrase words. Even with M/N, in the end you are relying on "trusted agents". It does not matter how realistically large the size of the set N or the subset M is when every single "trusted agent" can be the weak point in security. In both cases you are still relying on trust and private key storage. But yes, multisig is more secure but nonetheless has the same security flaw. And don't say you can use multiple authenticators. Thats the worst security ever. What if something happens to you? Does your corporation die when you die because you centralized the multisig access to yourself?

Also, if you don't want to listen to anyone but yourself maybe you should stop posting on Bitcointalk? Just text yourself messages and reply to them every now and then. You are the only person who can deal with your pompousness. This place is for swapping ideas, not suffering your superiority complex and autistic finger-pointing at every single mistake someone else makes.

It was a mistake unignoring you.

[livingfree]

I've watched a video that a crypto company in Japan keeps their most bitcoins/crypto into a hardware wallet. It's safe and it has glass covers and only a few executives has direct access on it.

I can't remember the name of that company but it was an exchange.

I think that there's really no difference on how an individual bitcoin investor keeps his bitcoins safe on a hardware wallet and the same as the enterprises.

In the era of MtGox nobody knew about air gapped machines or hardware wallets. They had it all on bitcoin core wallets and we know how it went from there. At least the hookers that Karpeles was paying for were happy with the money they were making.

Most whales need fast access to their money so I'd expect them to hold it at home with keys on some engraved metal plate so it can't be destroyed in a fire. That's what I'd do. A wallet can be made small enough for you to hide it anywhere like in the floors or behind a lose tile in the kitchen. I have my coins on a hard drive in a fireproof safe. Even if someone manages to steal that I'll have backups hidden in a safe place that will allow me to access and move the funds before anybody can crack the password. The more money you have the more security you need.

It is true that there's more security that you need to do when you've got a lot of money and the same goes for the exchanges. They've got many ways of keeping it but that's one that I've seen before.

The way you're keeping your keys through engraved metal plates is actually a good one and it's not the first time I've read about it. My worry is that I've got no one that will do it for me since anyone can be a silent crypto investor and even that metal plate engraver could be aware of the private keys and I don't know how to DIY.

Maybe in the future, I'll do it on my own and years ago, it's not a problem to allow someone do this for me since only a few is aware of private keys.

[Leviathan.007]

There are many other topics about this to say how the whales are saving their bitcoins since none can make sure about the owner of each wallet address unless they leak something, you cannot make sure about the owner, because the whales are usually saving their bitcoin in multiple wallet addresses that's how they cannot be tracked by other people because instead of one big fat wallet they will have multiple normal wallets to stay away from getting tracked, also since they have many bitcoins and they bitcoins worth a lot they will spend some money to buy a cold hardware wallets because the free whales are mostly unreliable for them.

[Moeda]

Big players like Michael Saylor, the president of EI, or even some exchanges, i have been wondering how these guys store their BTC, their solutions, and their hardware storage.

Do any insiders know something? BTC

Bitcoin is divided into several functions, trading, mining, holding, and gaming. There may be many other functions that can be used with Bitcoin.
The question is whether Michael Saylor trades Bitcoin himself? probably not. He is the shareholder of course every asset will be managed by their trusted team. If the asset exceeds the needs of the exchange, they will store it in a hardware wallet. It is possible in most exchanges to own shares of Michael Saylor.

[PrivacyG]

From the highlighted sentence in the text, it turns out that whales should store their crypto in a titanium safe, and the safe in an underground bunker under a mountain with protection? I expected someone from whales to share his personal way here, at least incognito, but it looks like my expectations will be in vain.

Believe me or not, if I was a whale I would choose the best security I could get for my money.  If that security requires what you said, I would if that made my dozens or hundreds of million safer.

It sounds insane to me to have millions on an online Electrum or on a mobile phone.  It sounds just as insane to me to have this much money sitting on a Hardware Wallet that has a few backup papers hidden around the house.  If I had that much money, I would definitely have much stronger security.  But at the end of the day, I am typically very paranoid so that is to be expected on my end.

I think franky wrote down the best way to do it.  The big chunk in Airgapped devices or other top security measures, the smaller chunks on a Hardware Wallet and the smallest amounts on an Electrum or whatever.  That way you are ensured the big chunk is safest.

-
Regards,
PrivacyG

[teosanru]

Big players like Michael Saylor, the president of EI, or even some exchanges, i have been wondering how these guys store their BTC, their solutions, and their hardware storage.

Do any insiders know something? BTC

Generally these happen in two ways, either on a cold storage which is a sort of a hardware wallet or in a private key hot wallet. I have even seen people storing a lot of coins on a central exchange as well. It's because these exchanges also don't target the big exchanges as these give them the most revenues. But yes cold storage on a hardware wallet like trezor is the safest option and most used option by al the whales. Moreover they don't even store it in one single wallet generally keep 3-4 hardware wallets to keep all their holdings.

[GreatArkansas]

I believe they are not storing their funds in just one basket, having multiple wallets is a big help here, especially if you are whales and popular or well known in cryptocurrency.
Additional thing is they have other security precautions besides storing their Bitcoin or other way how their Bitcoins are safe beside storing it on some wallets.

[m2017]

From the highlighted sentence in the text, it turns out that whales should store their crypto in a titanium safe, and the safe in an underground bunker under a mountain with protection? I expected someone from whales to share his personal way here, at least incognito, but it looks like my expectations will be in vain.

Believe me or not, if I was a whale I would choose the best security I could get for my money.  If that security requires what you said, I would if that made my dozens or hundreds of million safer.

I perfectly understand you and agree that when a lot of money is at stake, more attention should be paid to their safety, and this is reasonable. Saving on this can create unjustified risks.

I heard somewhere (can't remember the source) how Winklevoss brothers store their seed-phrase: it seems that the seed is divided into 3 parts and each part is stored in a safe deposit box in different banks. Something like that. They may have changed this method since then or it was just a lie as it is a public statement. I see no reason for the owners of fortunes to reveal such secrets.

It sounds insane to me to have millions on an online Electrum or on a mobile phone.  It sounds just as insane to me to have this much money sitting on a Hardware Wallet that has a few backup papers hidden around the house.  If I had that much money, I would definitely have much stronger security.  But at the end of the day, I am typically very paranoid so that is to be expected on my end.

Just not on mobile phone. This method is suitable only for small amounts, for "pocket expenses". I would be very surprised if any one of the bitcoin-millionaires keeps his fortune on a mobile phone, even if he is technically very ill-informed.

[PrivacyG]

They may have changed this method since then or it was just a lie as it is a public statement. I see no reason for the owners of fortunes to reveal such secrets.

Some people see banks as a storage method free of failure.  I do not.  I despise banks.  I absolutely hate them and would never trust one in my life with anything.  They failed multiple times before, they did sketchy stuff multiple times before and they are definitely not innocent today.

They do give you however this false feeling of safety.  I, personally, would not trust storing my stuff at a stranger's place and one of the main reasons is that there is one HUGE point of failure.  You never know whose eyes have been on your seed.  With that being said, if you are a billionaire and suddenly become a three letter agency target, there is one question I have for you.  Leaving morality and legality to the side, how hard is it really for a three letter agency to get to your safe?

-
Regards,
PrivacyG

[m2017]

They may have changed this method since then or it was just a lie as it is a public statement. I see no reason for the owners of fortunes to reveal such secrets.

Some people see banks as a storage method free of failure.  I do not.  I despise banks.  I absolutely hate them and would never trust one in my life with anything.  They failed multiple times before, they did sketchy stuff multiple times before and they are definitely not innocent today.

I gave only one example about whales which store their btc, which I know. considering that it really was just like that, and not otherwise. My personal attitude to banks, to put it mildly, is also not very positive. If I were a millionaire, then of course I would not keep my recovery phrase in the bank, like Winklevoss brothers. All the same, these are people of a completely different level and influence, therefore, what banks can apply to ordinary clients will in no case be used against such persons. "Quod licet Jovi, non licet bovi."

They do give you however this false feeling of safety.  I, personally, would not trust storing my stuff at a stranger's place and one of the main reasons is that there is one HUGE point of failure.  You never know whose eyes have been on your seed.  With that being said, if you are a billionaire and suddenly become a three letter agency target, there is one question I have for you.  Leaving morality and legality to the side, how hard is it really for a three letter agency to get to your safe?

-
Regards,
PrivacyG

I suppose that this will not be difficult for them, therefore, it is better for millionaires to use other storage methods. Whales too. Just in case.

[OgNasty]

True whales store their BTC at the bottom of the ocean.  Typically as a result of a boating accident.  At least that's what I hear.  Makes sense given they spend a great deal of their life under the sea.  I wouldn't know personally because I dropped my hardware wallet overboard while enjoying a sunset cruise.  I wouldn't doubt it though.  With such a vast area of our planet covered in water, it seems logical that a good chunk of the world's Bitcoin be stored there.  My only question is, how long before someone starts a company combing seabeds for hardware wallets?

[ChiBitCTy]

I know a few whales and they normally store their bitcoin in a number of ways. I know exchanges tend to store coins the same way as well. They normally store coins in a mix between cold storage wallets such as paper wallets as well as utilizing hardwares wallets such a Trezor and Ledger.