Topic: How do big companies store their bitcoins? (Read 460 times)

Big companies typically store bitcoins using a combination of highly secure methods to ensure safety, accessibility, and regulatory compliance. Here are the common approaches:

1. Cold Storage

Definition: Storing Bitcoin offline, disconnected from the internet, to reduce the risk of hacking.
Methods:
Hardware Wallets: Specialized devices like Ledger or Trezor.
Paper Wallets: Private keys printed on paper and stored securely.
Air-Gapped Computers: Devices never connected to the internet.
Examples: Exchanges like Coinbase and institutional investors often use cold wallets for the bulk of their holdings.

2. Hot Wallets

Definition: Online wallets used for quick access to funds.
Purpose: Primarily for operational needs, like facilitating customer transactions.
Risk Management:
Storing only a small percentage of total holdings.
Using strong encryption, multi-factor authentication (MFA), and firewalls.

3. Multi-Signature (Multi-Sig) Wallets

Definition: Wallets requiring multiple private keys to authorize a transaction.
Benefits:
Reduces the risk of single points of failure.
Increases security by requiring approval from multiple parties.

4. Custodial Services
Providers: Specialized companies like Coinbase Custody, BitGo, or Anchorage offer institutional-grade security.
Features:
Insurance for stored assets.
Regulatory compliance.
Advanced security measures like biometric access and hardware security modules (HSMs).

5. Diversified Storage Strategies
Why: To mitigate risk, companies often spread their holdings across multiple storage solutions.
Examples:
A mix of cold storage for long-term holding and hot wallets for day-to-day operations.
Geographic diversification of storage locations.

6. Insurance and Audits
Many companies insure their Bitcoin holdings against theft or loss and undergo regular security audits to ensure their systems remain robust.
Best Practices
Access Control: Limiting access to private keys to authorized personnel only.
Key Backup: Storing encrypted backups of private keys in secure locations (e.g., bank vaults).
Monitoring and Alerts: Real-time monitoring to detect suspicious activity.

..Or they develop their own thing mixing things up and making it more convenient for themselves.
 

The best method depends on the company's bitcoin volume transaction frequency and security requirements. Generally large companies use a combination of multiple methods big companies use different techniques and technologies to store bitcoins. Considering the volatility of bitcoin and the risk of hacking these storage methods are tried to be very secure and reliable. They are hardware wallets these wallets are used to store the bitcoin private key offline as it is the most secure option from hackers. Cold storage is also an advanced version of bitcoin storage for large companies it has multiple levels of security features and is commonly used to store large amounts of bitcoin.

They wouldn't need to buy wallets per se - just have custodial service to do all the heavy lifting.
About smaller businesses  - I just put my five cents of thoughts into the mix, because it was already said about what big fellas could use to protect their funds, and there were no accidents on my memory from biggies in that regard.
And for me, the future brings much more to the table for smaller companies to shine and try Bitcoin for themselves - and they will need to guard themselves too. That's why I wrote about it in my post.

It is certainly their right to secrecy and probably they will only talk about numbers with percentages that are likely to be known to the public. What kind of business are you talking about and how does it relate to the substance of the discussion we are discussing? There are many who come to bitcoin and it is more than just small companies, large and institutions, maybe the greater adoption will have an impact on the steps of guarding their assets and that is why the substance of the discussion is more about the use of much more secure wallets that will be used.

Spending large amounts of money must definitely think about the level of security and that is in line with what we want to hear. If not there is probably no point for companies to buy wallets especially for storing their bitcoins and if we refer to some of the things that have been explained maybe there we will find the answer.

There is not going to be a specific wallet to hold upon in this margin but the fact is that big institution companies are usually stored their Bitcoins on the cold storage networks which as a hardware wallet, it is highily security offline reserved and are also multisig signatory to be accessed.

That is likely to be a cooperative assessments before gaining access to execute transactions in the wallet.
There in, it is well safe from an single individual in the institution to gain access to the wallet and so also from malwares and online scammers attacks.

There is no special approach that they do. They're the same as us, they can do multisig, use hardware wallets or even paper wallets. Depending on how confident they are with how they store their Bitcoin holdings.

Those that are hired to maintain and keep these company wallets probably have signed their own contracts, the NDAs and they're paid very well to protect it. So someone doing a foul play with their wallets, it's close to impossible if they are keeping it with multisigs and a hardware wallet that's kept on a vault.

Exactly. They wouldn't have to keep all their bitcoin in multisig, for example. Some of it could be in multisig, another part in a hardware wallet, and a third part with a custodian. I am pretty sure that many institutions use custodial services to handle their bitcoin bags. These companies work with third parties for many other reasons, storing bitcoin and private keys is just an additional service. Even Saylor and MicroStrategy keep their coins with custodians. That's just how it is.

I don't know your implication with "Combine multiple setups" but I think complexity is terrible. I guess you implied that they, with big fund, can split their fund to different wallets, and they can use different methods for setup and backup of these wallets. Like 10 wallets with multisig, 10 wallets with cold wallets ...

If combine here means combination of different things in backup, it can lead to diaster when in the end they fail to recover these wallets.

How to backup a seed phrase.

There are multiple ways in which companies and institutions hold their coins and store the necessary private keys. It's also a question of how knowledgeable they are about Bitcoin and features like cold wallets and multisig setups. I am sure there are many that use exactly those options. However, other entities rely on third-parties to help them secure their bitcoin. Finally, they use hardware wallets like regular folk. Combining multiple setups is also an option.

I do think a person in question would be paid much to keep it a secret.
Maybe he would lend us a hint or two, but that would be it.

I don't know how other companies store their Bitcoins but Freebitco.in, which was one of the most popular Bitcoin website (and one of the earliest adopter of Bitcoin) is the only website that has talked about that. As freebitco states, they use a combination of hot wallets, hardware wallets and BIP38 encrypted paper wallets but I assume, big companies like Binance for example, store it in a different way, which I think is a secret. They must be using multisig wallet and their crypto wallets might be generated by a very secure air-gapped computer or they might have their own software and hardware. I doubt these companies use wallets like Trezor and ColdCard but what they exactly do is a secret and I believe, they are extremely careful about it because once Bitcoins are gone or wallet keys are lost, it's impossible to recover Bitcoins.

I'd really love if someone has an experience in big companies and share some info with us. I had the same question a year ago.

As it was said - they probably have custodian services to do so - I mean, to accumulate BTC securely.
And these cost so much it's no wonder they don't worry about much 

It is difficult to answer this question because most companies will not publish where and how these assets are stored. However, referring to these words "Sound Money Deserves Sound Custody" the company will store their assets in an independent wallet that can maintain control over those assets.
Most Companies that hold Bitcoin treat it as digital gold and often hold Bitcoin for long-term investment. Choosing the right wallet is an important step in keeping assets safe and managing investments well. There are different types of Bitcoin wallets available, each with its own unique characteristics. The storage flow is not much different in general, after Converting Fiat to Bitcoin, then ending up in a multisig cold wallet.

Their coins - their right to keep their secrets shut 
In all honesty, big companies know their business, surely.
We can only say about smaller companies that will flock to BTC in the near decade to have (just maybe) some issues or breaches in the future to come, and I am eager to see something like that to be set as an example for others.

Big companies must have a secure wallet to store bitcoins because it is a top priority when they buy bitcoins and maybe it has been answered by previous users on the main page. But if you ask the company, I am sure they will never want to answer what wallet is used in detail because talking about security is impossible to talk about in public. If talking about being afraid or not, it really depends on the company, this is not a small number and they must have prepared definite security measures.

If the company dares to invest a large amount of money in bitcoin, then the level of security they use will certainly be much better. They don't want to risk losing assets and have certainly prepared carefully to use a much safer wallet.

I believe they use an air-gapped hardware wallet as cold storage and track their portfolio somewhere. They may also use multi-sig wallets. I am not sure if one can create a multi-sig wallet using a hardware wallet. But if it is possible, I guess most companies use this technology to store their Bitcoin. I don't know which hardware wallet is better than the others.

However, as a user, if you have thousands of dollars of Bitcoin, you should use a hardware wallet, which may only cost you a few hundred bucks. But it is worth it. So, consider buying a hardware wallet if you have Bitcoin and want to secure it. Most importantly, store your seed phrases offline and securely.

While I do agree with hard wallets, I also think that they almost all have their own servers as well, and backups and so forth. They do not really need to have a hardware wallet, do they? I mean they could just put the wallet somewhere, and they could put backups of it in ten other places, without needing another tool.

I mean they could also get it too, like they may have ten different ledgers and put it all on different ledgers so it would be diversified and all that, but I am not sure if there is a "need" for it, that would be something they do because they want to do it, not because they have to do it. If I was a big company like that, I would put it all on my server, in different wallets, to make sure it's diversified, and would back it up in 10 different places, just in case, even in out of office places too. That way it would look much better and we could have a better approach and could do much better as well, results would show that it's safe and secure enough.

Hardware wallets can be open source or close source, and companies with big funds must use open source hardware wallets. Hardware wallets are not automatic good.

They need to buy it rightly and back up their wallets properly too. It's important for their wallet recovery later and this recovery step is important to secure their fund.
[LIST] Open Source Hardware Wallets
[GUIDE] How to buy a Hardware Wallet the right way
[LIST] Multisig Wallets

Backup
How to back up a seed phrase?

Some of their addresses, active ones, may be known, but most of them, and especially the ones used just to store BTC - of course they would try to make them as much unknown as possible to everybody around.
After all - privacy is key, and big companies try to keep up with that just like ordinary enthusiasts from their side.

Usually Hardware Wallets.

You need to ask to that big companies to have a real answers. Those big companies prepare many things before they  start invest in Bitcoin. Whatever wallets they are used, that is their business but we can guess from all wallets that we know that they may used. They don't afraid to keep such a large number of Bitcoin because they know how to secure their Bitcoin. I don't think they will tell public what wallet they used to store Bitcoin although some of them may tells that. We have a standard procedure how to secure our wallet and what wallet that suit for us so that is what the big companies will do. I am sure they already read all things necessary for that.

But as much as I know different companies use different approaches, they basically use multi-sig. And they use hot wallets to complete daily transactions, especially the most important is cold storage. Basically there are multiple backups that every employee is connected to and they manage it efficiently enough to keep it safe. And they store it for a long time and manage it more securely, so it is quite secure.

Diversification is bliss.
 
Even for the big guys.

It is a company right? Either big or small they have the money to go the best way of storing their Bitcoin, and that's through cold storage, off the  Internet, the safest way possible I believe.

The fact about storing Bitcoin the best possible way is not even costing anyone a lot, I suggest every one to go same route as these so called companies, like I've said it takes few hundred dollars to get the best open source hardware wallet.

I recommend airgapped bitcoin wallet like Keystone, can't go wrong with three security chips in one wallet, so far this wallet is one of the best, there are other options available too.

Big corporates do not hold their Bitcoins in a hardware wallet or something similar to this. They have enterprise level custodian services available in the market which are usually insured. Companies like Microstrategy, do not keep their Bitcoins in one location. That's the basic safety they all employ to safeguard their Bitcoins.

You can refer to this article if you want to know more about it -

https://river.com/learn/how-should-a-business-store-bitcoin/

Hope this helps!

I think they use cold wallets, but different companies with different approach.

It's like a cherry on top of each cake - each cake would be sweet, but the cherry on top would be different in taste and form.
The cherry would be the security secrets in question.

Certainly, rich companies with hundreds of bitcoins in their assets provide for all security factors that can save their assets in all possible emergencies. It is pointless to talk about all the intricacies of storage here, since each organization will have its own secret one way or another that no one will ever show publicly.

https://river.com/learn/how-should-a-business-store-bitcoin/

Multisigs, cold wallets, personal solutions, you name it - companies would use all of these and more, in my opinion.
When you are big enough, you can rely on yourself, and that is, of course - the best way out of security issues due to you being the one in control, not the one who does software / stuff for you.
Relying on somebody being a giant in that field may lead to trouble.

As I know big companies usually store their bitcoins with big quantities in something called cold wallets (These are wallets not connected to the internet ) which makes them very secure against hacking. They might use hardware wallets like Ledger or Trezor or even create custom solutions in strong and secure computers. For extra security, they often use multi-signature (multi-sig) wallets where several people need to approve a transaction before funds can move, and thus is in case someone could get access to that computer or hacked it.
Accessing the wallet needs a procedure with private keys. In multi-sig setups many wallet should be combined and no single person has complete control on the funds. Companies also back up the keys in secure locations,
like vaults.

Honestly, I find that half or even the more important part on storing bitcoins is not just about the method or place but also avoiding many mistakes to let hackers easily get access to you and make the company vulnerable .

Good question, but I will speculate that some big companies might used Coinbase prime custody:


https://www.coinbase.com/prime/custody

Even Bitgo has this kind of custody as well, the good thing that this "trusted" exchange are being used as a custodian is that they are fully insured, so it covers against theft and loss.

And yes the old and traditional way, Multi-sig wallet.

when it comes to this, multisig always appear in my mind, no way the company will just let one person oversee their wallet and if something bad happen all the asset gone.

but knowing that managing the private key on their own gonna add some unnecessary risk and point of failure, i'd bet they will let other company that specializes in crypto and is highly trustable to be managing their bitcoin.

but yeah, there's always possibility that they are creating their own tools, just for the sake of security but I doubt most of big companies are doing that, and also, they definitely won't tell you about how they secured their bitcoin.

Wrong, Saylor makes no secret of the fact that they keep their funds with Fidelity Custody.


I believe that the third party service  that specialize in custody and security measures will be the default option for large companies, such as MSTR. For a large company “not your keys not your coins” makes no sense.

Multisig wallet with co-signers can help to increase security of fund from wallet hack or abusement of a single person. With a single signature wallet, if a single person dies or if he abuses it, the fund will be stolen.

It will be the end for that company if the founder steals the company fund and run away, or if the founder and the only wallet owner died without any back up left for anyone else.

A Crypto Exchange CEO Dies—With the Only Key to $137 Million.

Companies usually keep their Bitcoin in cold storage or multi signature wallets. Like Ledger or Trezor hardware wallet to store their Bitcoin offline so hackers can't get to it. I also think that multi signature wallets is a must,  because it require a bunch of people to approve transactions is. I guess some businesses even go for hybrid wallets where both the company and the user have control over access. To avoid or reduce human error or even fraud, companies are setting up tight security stuff like multi factor authentication and encryption. They keep their Bitcoin stash in different wallets to avoid any single point of failure.

Nowadays, storing bitcoin in single signature wallet is no longer popular especially if it is a company, corporation with big fund. They will use multisig wallets for storage, cold wallets but there are entities that don't want to store bitcoins by themselves, but choose custodians for example Coinbase doing this for them.

I don't say using a third party service, like Coinbase, as a custodian for your Bitcoin fund, is safe and best way of storage, but it's fact. You can check it with Bitcoin Spot ETFs in the USA and many of them choose Coinbase as their custodians.

Reminder: do not keep your money in online accounts
Bitcoin Spot ETF Custodians.

Firstly, they keep such things confidential for security and safety purposes. However, we can make guesses and think of the solutions they could use, such as multi-sig cold storage or custodians that take care of the funds on their behalf and charge them money for it. When either multi-sig wallets or custodians are involved, there is no human factor that can cause any harm to the company and its coins.


Giving charge of the funds to a single person or even a team with all the access to the wallet(s) can be foolish, as @examplens said, because if they can move the funds, what will stop them from doing that and running away with the funds? The company is not going to chase a few people around the world because they stole some of their bitcoins, even if they try, the odds of them finding the culprits will be very low.

Why do you need to know where they store their Bitcoin and how they do it? There is something called privacy, this is what Bitcoin gives you that nobody can interfere with your investment unlike the banks where even the government can have access to the account number and the names of the account. The companies store Bitcoin just the way you store your own Bitcoin, they used hardware wallet like the ones you used like Trezor and ledger.

There way of storing Bitcoin on their wallet might not be straight forward like a single spender, they do create wallet with M of N signature where 2 or more private keys are required before any Bitcoin can be spend from the wallet. This protect the compby from the fund been mismanage by one person or stolen by some. Even in a situation when one person who has the ledger is been compromised, the funds can be spent because of the M of N signature requirements.

The company wallet must be multi-sig, one person cannot be allowed to have full access independently. Especially if the wallet and the Bitcoin in it are not for daily needs.

There were several cases where employees abused access to the wallet and transferred coins without authorization. The funds of a large company are not the same as the household budget, therefore they are not treated the same.

For me there is no big deal on where company needs to store there bitcoin, they can store in a any non custodial wallet, provided the seed phrase is safe and  secured and also not accessible to anyone apart from the the person in charge of the company finance. And also the device used for storing of that wallet should be strongly protected by malware protection and antivirus to protect it from phishing attack or viruses.  Apart from that the may decide to store in a cold wallet and many other.

Different companies with different approaches. One option I think all companies will use is multi sig. There will be multiple people involved in the decision making process, so there will definitely be the need to require more than one signatures to access it.

Other features will be cold storage, multiple back ups, and I believe there are some that hire third parties to handle the secure storage of their wallets.

Maybe a bit off topic here but I was reading something on Reddit the other day that said the feds apparently found the seed phrase or whatever for one of FTX's cold wallets or something that held tens of millions of dollars.  It was just written down on a scrap of paper sitting on someone's desk.  Like next to a bunch of other random papers and stuff and  they didnt even remember they had the wallet until the investigators were searching their offices.  If thats true, it really shows how little some of these companies cared about properly securing their assets and accounts.  Though I guess we already knew FTX was shady and not a serious company.  

You will be surprised when you see the way big companies or celebrities buy bitcoins, they never buy all bitcoins at once but they buy bitcoins at different prices at different times over different periods. If you've seen El Salvador's plan to buy bitcoins, you'll understand. El Salvador's president has announced that his country will buy one bitcoin per day. However, if you can buy Bitcoin and hold it for a long time in the DCA method, it will definitely be a significant plan of all plans.

Multisig, large custodians like Coinbase specifically meant for big companies such as Microstrategy and the likes of them.

This is a question that even if Michael Saylor is asked, there will not tell you as if will possibly compromise their security.

But everything that Fatfork has answered correct.

There are different method big corporations safeguard and store their coins.
For holding they make use of hardware wallets while for day to day transactions hot wallets are used.

Well to eliminate the risk of human. Factor Multisig wallets are commonly used since access are split among different personnels.

For example most Bitcoin ETF rely on a custodian especially Coinbase to safekeep their Bitcoin
Which are stored in an hardware wallet and kept in a safe.

Just as an addition to what fatfork already said about companies preferences in selecting which wallet that best meat their preference at a time, but primarily most companies will only use hot wallet for transactions but most definitely since most of their daily transactions will be in fiat so bitcoin won't be a big option for them so at that milti sig cold wallet is their best shot, just as fat fork said this is just an assumptions since most companies won't reveal such info.



The image above shows how/ways businesses handles their Bitcoin reserves.
Source: https://river.com/learn/how-should-a-business-store-bitcoin/

This is a rather general question and different companies handle this in different ways, but my best guess is that most reputable and well-known companies keep the majority of their funds in multisig cold wallets.

For day-to-day transactions, hot wallets could work but those tend to have hardcore security too.  The specifics likely differ between companies, but I'd bet access takes jumping through multiple hoops. Like layers of authentication approvals, audits, etc.

But I'm no expert, just speculating based on what I know.  The inner workings of these systems aren't something they share publicly.

Hi guys. My question is, how do big companies store bitcoins? Which wallets are used?  What is the procedure for accessing the wallet? And how they are not afraid to keep such a large number of bitcoins worth millions of dollars in their wallets. The human factor can play a very cruel joke.