How Whales Store Their BTC

[Jason Brendon]

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

[Despairo]

I don't think they will have anything special if they're a big person, the educated person will hold their coins on hardware wallet, while uneducated person will hold their coins on web wallet or exchanges. Even Elon Musk did hold his coins on shady wallet exchanges e.g. freewallet.

While exchanges are mostly use hardware wallet or cold storage and multisig wallet. Multisig wallet is needed to make sure there's no one will rob the money, so when they want to send large funds from their hot wallet, their core team will know and there's no miscommunication etc.

[bittraffic]

I don't think they will have anything special if they're a big person, the educated person will hold their coins on hardware wallet, while uneducated person will hold their coins on web wallet or exchanges. Even Elon Musk did hold his coins on shady wallet exchanges e.g. freewallet.

While exchanges are mostly use hardware wallet or cold storage and multisig wallet. Multisig wallet is needed to make sure there's no one will rob the money, so when they want to send large funds from their hot wallet, their core team will know and there's no miscommunication etc.

What are you talking about? If Elon sees Doge be decentralized enough than the regular coins out there then this guy had studied enough how to protect himself. Everyone knows a hard wallet is a perfect way to store thier coins, Elon knew that but they are not doing it because making a profit from the volatility is a better way than storing. Whales trade, they know they can make money out of the money they have.

[nullius]

HSMs (Hardware Security Modules) and airgap machines.  With keys generated by a random number generator designed by cryptographers, not with an ad hoc homebrew-crypto scheme.  The private keys are either isolated inside of a high-security device that connects to a networked computer, or isolated so that the private keys never come anywhere near a networked computer (airgap).

For large amounts of funds owned by an institution, this may be combined with a multisignature scheme.  For instance, I read somewhere about a major exchange that stores most of its BTC in such a way that several different HSMs in the possession of several different trusted employees need to sign to move funds.  That is functionally similar to a “two-man rule”/“dual control” system, although it does not in itself assure dual presence; I am curious about whether in practice, any such systems in Bitcoin enforce a dual-presence requirement, as may be feasible if keymat can only be accessed through physically secured systems that enforce dual-presence.

(Not an “insider”, whatever that means—but I think it’s (un)common knowledge in security circles that this problem is solved in the ways that I state.)

[mk4]

What are you talking about? If Elon sees Doge be decentralized enough than the regular coins out there then this guy had studied enough how to protect himself. Everyone knows a hard wallet is a perfect way to store thier coins, Elon knew that but they are not doing it because making a profit from the volatility is a better way than storing. Whales trade, they know they can make money out of the money they have.

Elon claimed a couple of months ago that his(or his kid's? I don't remember) DOGE on FreeWallet was locked. If I remember correctly he mentioned that he doesn't hold THAT much DOGE in the first place anyway; hence why he probably didn't take security seriously.

[Franctoshi]

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

There's no much special thing or way about how they store their Bitcoin , I think they are going to choose the most secured way most people equally use in storing their Cryptos , This made me to recall one very interview I watched on YouTube about the Ethereum Co founder Vitaliks when asked how he stores and secure his cryptos , In that video he narrated some extra security measures he put in place in order to ensure no one gets access to his Wallet. Both Michael Saylor and every other Bitcoin whale will do same.

[goldkingcoiner]

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

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. Although as far as wallets go, I would not think they use web wallets or exchange wallets or anything like that which might be accessed by third party members. Probably a hardware wallet with extra security.

And if any insiders did know something what makes you think they would post it on here? Boredom? Bragging rights?

[fiulpro]

Most whales stores their Bitcoins in a place that would be non accessible to the public eyes, what they can do in these circumstances ?

- They can indeed store it in paper wallets of hardware wallets but do understand that a whale is not a holder their sole purpose can be just moving it around to create some waves in the market making people sell/buy their coins

Therefore at the end of the day they can use different names and invest the bitcoins in companies, in other things as well, keep them sorted in a wallet so they can take it anytime and move it around as well. Ofcourse the wallets have impeccable security because who would wanna loose so much money ?

[Lucius]

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

A few days ago we had a similar question, and according to the information we have, Microstrategy uses the self-custody option for most of the Bitcoins they bought, while, for example, Grayscale uses the custody service from Coinbase.

MSTR and GBTC (Grayscale) Custody in Coinbase?


The only thing that is right is that everyone keeps their private keys, everything else is wrong and represents a risk. Although I don't see why any of these extremely rich people would publicly share how they protect their digital assets.

[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.

[PrivacyG]

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.  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.

-
Regards,
PrivacyG

[KaliLinux]

I don't think they will have anything special if they're a big person, the educated person will hold their coins on hardware wallet, while uneducated person will hold their coins on web wallet or exchanges. Even Elon Musk did hold his coins on shady wallet exchanges e.g. freewallet.

While exchanges are mostly use hardware wallet or cold storage and multisig wallet. Multisig wallet is needed to make sure there's no one will rob the money, so when they want to send large funds from their hot wallet, their core team will know and there's no miscommunication etc.

I agree and this reminded me of a topic here where the discussion was about this Nuclear vault-type safe to hold the wealthy Bitcoin access Info which some of us even believe was way too much then. I think we might be overthinking that those whales might be doing things way different from what some other Hodler do in storing their Bitcoin like the hardware wallets but I think they could be the same and also being more careful with the access info too. 

[kryptqnick]

If we're talking about rich people storing their coins personally, they might do that in hardware wallets or something like that. But if we're talking about the company or state's funds, then there are probably financial managers handling that and making deals with some other companies. In case of El Salvador, they have Chivo wallet, and it would make sense if the state's crypto funds are stored there (maybe the president's personal funds as well). And as Lucius pointed out, Grayscale uses a Coinbase service, which goes in line with my assumption that things like that would happen via centralized storage. Unfortunately, I don't think we'll ever have reasonable knowledge about it because it's big money we're talking about, and it makes sense that the whales will do their best to hide as much info about how they store the coins as possible.

[franky1]

for large wealth amounts, multisig work. because there is no central point of 1 individual/one key to hit
on an airgaped PC where you then manually copy a RAW TW to a active internet pc

for say monthly amounts that are not used daily. hardware wallets.

for daily amounts normal wallets/nodes

the idea is hoard the massive amount as secure as you can where even if a bugler entered your home and tried blackmailing you. you personally cant give them your huge wealth as you dont have complete access to all keys at the same time.
where as if you were blackmailed using threat to real life. the most you can hand them is a month or so of funds
..

its a simple task of have wallets for daily weekly amounts and when they deplete move funds from weekly/monthly hardware wallet.

when weekly/monthly hardware wallet funds deplete. small allotments of 'coldstore multisg' weal wallet to the hardware wallet

the reason to have the middle wallet of hardware instead of just cold wallet multisig-> hot wallet, is that losing daily amounts to some hack/malware doesnt hurt as much as a weekly/monthly amount.
so its an extra layer of separation for risk tolerance and loss prevention by not having monthly amounts on hot wallets

[goldkingcoiner]

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. 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.

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.

[Kakmakr]

I think your average FIAT whale that bought a lot of coins for speculation, will use reputable Exchanges to store their coins. They do not want to burden themselves with too much technical hardware or software solutions...and they want those coins to be readily available... for those times when there are wild volatility in the market. (They do the same with Forex trading and commodity trades, so they will stay with what they know)

The early investors are more technically inclined and they also understand the advantages and the goal of every Bitcoiner to have financial freedom. (Controlling your own Private keys) <== They use hardware wallets & air-gapped systems.  

[hZti]

There is the exact same topic atm: https://bitcointalk.org/index.php?topic=5408578.0 . As it was said there the best is to use a hardware wallet or some other form of cold storage. In general it is also recommended to do multisig and more then one backup.

[maartenhaha]

I think they store bitcoins just like everyone else store them because bitcoin wallets are guaranteed not to be hacked, maybe they store keys in software not store them on internet connected devices. like the satoshi wallet until now it is still safe no one can hack the satoshi wallet.

[tjtonmoy]

The safest way to store everything in a hardware wallet. Even if you are a whale or not. It is good practice to keep them offline and away from scammers.
Also they will invest in many platforms to grow the amount.
Price different eventually caused by the whales. So they store some and invest in the right time.

[mk4]

I think they store bitcoins just like everyone else store them because bitcoin wallets are guaranteed not to be hacked,

Uh.. Saying "Bitcoin wallet" could even mean web wallets, which are definitely not hack-proof.

maybe they store keys in software not store them on internet connected devices.

..or maybe offline non-digital backups like a piece of paper so no hacker can reach it? You know, like people always recommend newbies do.

like the satoshi wallet until now it is still safe no one can hack the satoshi wallet.

Satoshi's wallet is uncompromised because safe to assume that he knows what he's doing security-wise. Probably only less than 1% of people are capable of such digital security.