Topic: How Whales Store Their BTC (Read 482 times)

Most likely they will store their BTCs in multiple hardware wallets which are inside some safe locks which are closely monitored and secured. Imagine, if you are an owner of tens to hundreds to thousands of BTCs, you would definitely invest into securing your wallets safety. Unlike banks who store your moneys inside a safe lock, you have the sole responsibility of depositing and keeping them safe until you use them for a specific transaction.

You would almost find it impossible to hear that a person is keeping their BTCs inside a respective exchange due to the nature of it being scammed in the past.

Considering that hardware wallets and air gap machines are the most secure wallets I think most of these whales would store their coins in these machines.
May be they are diversifying by storing their coins in different machines and storing them at different locations.
Nobody would announce their stored coins publicly anyway. So we can just speculate it.

I mean you may not know the owner of it, but you could definitely know how it would be done by looking at the big numbers and see address' with huge bitcoins in them and how they are storing it. I personally faced with many people who had 5k btc or more, that was my job for a while (worked at local ledger affiliate in my nation) and I can tell you that I have seen people that printed it on paper to people who did much more work.

So, there isn't a single answer to this, there are methods from as basic as keep it on exchange (look at how much liquidity in exchanges, meaning people put their money there too), to complex stuff like having medallions made with the phrases and such.

I also don't think they have so much difference with regular crypto holder. Also, I think they also store in various addresses with secure keys. Not only one address but several. They can also possibly distributing their funds to different active trading accounts. I don't think they are only using one exchange in terms of trading their coins. But for sure, they also have similar mindset to regular crypto user when it comes to securing their funds.

I don't think there is any specialty to it for whales and regular bitcoin enthusiast. The wallets are very affordable and available and crypto enthusiast get these, stalk there coins and keep there private keys or seed phrases safe. That's all that really matters in the end, the level of security you give to your seed phrase or private key as, they define whom has access to or owns the wallet and not just having a wallet itself.
I think these guys would be a lot regular about the way they go about there hodlings buy would occasionally move it unto the exchanges to make some profit off it. That's what it's often about for them isn't it.

No one really knows but we could really assume about the basics but of course with added security.
As a whale or does simply hold huge chunks of coins whether bitcoin and other altcoins in the market then you cant really just make yourself that too confident on storing up your
hardware wallet under your bed specially if you do know that it isnt something an amount that you would be comfortable with on just having that kind of security.
Some might be using up non custodial wallets and making out some engaraved PK's on a metal sheet and store it on whatever they do prefer
but no one really knows on how they've been doing in terms of the security of their coins.

They do not really have more options than us, they are either using a hardware wallet or some sort of cold storage to secure their coins properly.

Now outside of the basics they could have additional security measures, like storing their hardware wallet in a safe or in a  secret room and hire guards to keep their personal belongings safe, however while that can improve security those are measures that are not necessary for the average holder like us since it is unlikely we will be attacked if we keep the fact we accumulate bitcoin a secret.

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.

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?

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."

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.

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?

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Regards,
PrivacyG

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.

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.

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.

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.

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.

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Regards,
PrivacyG

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.

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.

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.

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.

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.

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.

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.

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.


Quoted for the lulz.


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.

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.

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.

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.

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.

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.

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

..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.

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.

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.

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.

There is the exact same topic atm: https://bitcointalksearch.org/topic/how-do-whales-keep-their-massive-amounts-of-bitcoin-5408578 . 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.

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.  

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.

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

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.

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. 

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.

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Regards,
PrivacyG

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.

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?

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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.

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 ?

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?

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.

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.

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.)

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.

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.

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