More secure ways of storing bitcoin? - page 3.

knowngunman

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Quote from: bitnote on October 16, 2023, 01:54:41 AM

How do institutional investors store and protect their Bitcoin assets?
Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

A lot have been discussed under this thread already and I believe your doubt have been cleared. That's one advantage of this forum because whatever you want to know, there are experts here who can put you through. I will not be left out from offering my two cents concerning the topic of discussion. Bitcoin is a risky digital asset which is difficult to trace when lost. Institutional investors are always cautious and careful when it comes to bitcoin security. Due to some fear of attacks, some institutional investors use third-party custodians to help manage and protect their Bitcoin holdings while some institutional investors typically use a combination of cold storage and multi-signature wallets to secure their Bitcoin assets. So I think it depends on the what or which one they consider more secured to them.

Ultegra134

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Others have already mentioned a few ways to securely store your bitcoin. Use the search function, and you'll also find plenty of other similar threads with similar concerns. You'll be able to read further replies and perhaps something that may suit your needs better. Anyway, I've simply resorted to using the Electrum wallet, stored on my second HDD, with a different system installation that I'm not using. I'm also planning to install Linux and replace the previous Windows 10 operating system. Otherwise, you can spend approximately $70 and buy a hardware wallet; it's not an extravagant amount of money for the safety of your funds. Although I sometimes believe that an Electrum installation is enough, providing that you don't download anything from unknown sources, such as torrents, and be infected by malware,

cheezcarls

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Cold hardware wallets are always the number one and best option for us to store BTCs. Nothing else. Hot non-custodial wallets aren't even guaranteeing us safety.

Plus you may never ever gonna disclose publicly about storing BTCs in your hardware wallet coz' that possesses risk when robbers may either enter your house or meet somewhere down the road and "painfully forces" you to reveal them.

However, it is also critical to store your seed phrases somewhere "extra safe" especially in terms of unexpected accidents, calamities, circumstances, etc. (e.g., exposed in fire and water). Although it's encourage to write them down on a piece of paper of notebook, but engraving them in an aluminum metal would be something worthwhile as it's both resistant to fire and water.

However, it's much more time consuming to engrave than just writing with a pen.

BVeyron

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Quote from: bitnote on October 16, 2023, 01:54:41 AM

How do institutional investors store and protect their Bitcoin assets?
Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

I suppose they can afford secure storage for seed phrases, they can use storage facilities of fiat banks, also, some can use secure data storing servers... There are many options which can be used for storing wallet data, even if there are thousands of cryptowallets. They can simply store data in a way they store digital fiat money and cash.

adaseb

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Instititions for liability reason don’t hold the coins themselves. They use a company such as Coinbase which does the custody for them. And coinbase has state of the art cold storage and security methods.

This is more or less how the bank holds your money for you. Instead of you holding large sums which might get stolen, you keep it in the bank and they hold it securely.

Xampeuu

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Quote from: Sarah Azhari on October 16, 2023, 07:13:52 PM

Quote from: bitnote on October 16, 2023, 01:54:41 AM

Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

it's not important to know how they save their Bitcoin, because even if you know it, it doesn't affect anything in your life or the value of your asset if used the same way with them. Maybe it will increase your doubt to keep hold of your asset if you know they saved it in exchange and felt they were on guard if the market does not meet their expectations. So, if I were you, I would believe in myself, and not use the wrong way the same with the institutional. Because they have a business target, and must take action immediately to sell their asset if the market crashes suddenly. So if they keep their asset on a non-custody wallet, or with the multi-signature way which is quite complicated to take action

Indeed, if you feel comfortable using your own method, you can do it, but if we want to follow the company's method to make it even better, there is no problem as long as we are able to carry it out and determine the choice of the best thing that we know is ourselves. This can be better than someone who doesn't have a stance, so he doesn't know where he's going and just follows other people's path.

SquirrelJulietGarden

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Quote from: Sarah Azhari on October 16, 2023, 07:13:52 PM

it's not important to know how they save their Bitcoin, because even if you know it, it doesn't affect anything in your life or the value of your asset if used the same way with them. Maybe it will increase your doubt to keep hold of your asset if you know they saved it in exchange and felt they were on guard if the market does not meet their expectations.

Trusting third parties is always risky. Think why Satoshi Nakamoto made Bitcoin? To have our own banks with private keys for our bitcoins.

Using third party services, trusting them means we no longer control our private keys and bitcoins.

Good Bitcoin wallets must be non custodial (we own private keys), open source (we can reproduce their wallet and test it or Bitcoin experts can test it through reproducible process).

Quote

So, if I were you, I would believe in myself, and not use the wrong way the same with the institutional. Because they have a business target, and must take action immediately to sell their asset if the market crashes suddenly. So if they keep their asset on a non-custody wallet, or with the multi-signature way which is quite complicated to take action

I agree. Using a good Bitcoin wallet, set it up by ourselves and have our own banks.

Verify wallet software before using.
Making wallet backups before using it to store bitcoins.

Sarah Azhari

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Quote from: bitnote on October 16, 2023, 01:54:41 AM

Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

it's not important to know how they save their Bitcoin, because even if you know it, it doesn't affect anything in your life or the value of your asset if used the same way with them. Maybe it will increase your doubt to keep hold of your asset if you know they saved it in exchange and felt they were on guard if the market does not meet their expectations. So, if I were you, I would believe in myself, and not use the wrong way the same with the institutional. Because they have a business target, and must take action immediately to sell their asset if the market crashes suddenly. So if they keep their asset on a non-custody wallet, or with the multi-signature way which is quite complicated to take action

Sophokles

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Quote from: bitnote on October 16, 2023, 01:54:41 AM

How do institutional investors store and protect their Bitcoin assets?
Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

Some of them use multi signature wallets to secure their funds and most of the time their overall portfolio is stored at multiple addresses. If an institution has 10k BTC they will store it in 5 or 10 different wallets. Some of the major institutions use custody services like Bitgo so that they can use insurance services as well. Some of them might keep their funds in centralized exchange to use them as leverage to use the opportunity of market manipulation by opening long and short position as most of these institutions get insider news from their sources.

CryptoBuds

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Quote from: armanda90 on October 16, 2023, 04:28:57 PM

Firstly, for all institutional investors with huge investment decision investing in Bitcoin needed decentralized exchange for storing or purchasing bitcoin before sending to personal wallet if want hold there or keep hold in decentralize exchange market account. I think not problem for huge investor exactly institutional investors hold their assets in trusted decentralize exchange such as Binance will get guarantee their account secure, but hardware wallet could be the best option place more comfortable secure bitcoin assets.
As institutional investors have planning with long term holding I think put Bitcoin assets in hardware wallet more secure than decentralized exchange such as Binance, Huobi and Kucoin have good trusted reputation but depend not our key is not our coins when have third party controlling with our bitcoin assets.

I don't know where large investors and institutions store their crypto assets, but as you said if they store on centralized exchanges, then it proves that centralized exchanges are safe. Right? That's contrary to what we discuss every day on forums, which is that centralized exchanges are not trustworthy because we don't own our private keys. But on the other hand, I don't think that large institutions will be unaware of the risks of centralized exchanges, they are veteran investors in the financial markets, they know everything.

So the question is, are centralized exchanges really that risky? FTX and Mt.gox collapsed but Coinbase was founded in 2012 and exists to this day.

komisariatku

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Quote from: bitnote on October 16, 2023, 01:54:41 AM

How do institutional investors store and protect their Bitcoin assets?
Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

I think every company has its own tricks for storing bitcoins and they will keep them secret for security reasons. But if we imagine, I think companies will store bitcoins in hardware wallets that use multiple signatures. Company officials will each have their own key and they will have to come together to open the company wallet

As far as I know, hardware wallets are the safest wallets and ensure that the computer device must be completely clean when used for transactions, maybe the company also has a special computer that is only used for transactions so that the wallet is completely safe from malicious attacks

n00ber

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Quote from: legendbtc on October 16, 2023, 09:28:16 AM

None of us belong to any organization so you won't get an answer from them but as an individual investor, as I know and as everyone has mentioned, hardware wallets are lthe best storage method available to us today. Most people get hacked due to investor carelessness, I have not heard of any errors coming from wallets like Electrum or hardware wallets. So you need to pay more attention to how you store your seed phrases instead of looking for the best from what the organization is doing.

You're right, I've read all the answers and no one knows what methods institutions store their bitcoins with, it's all just guesswork. Some people say that large institutions store bitcoins on exchanges but ultimately they think that storing bitcoins on hardware wallets is safer. If we know using hardware wallets is safer, why don't large organizations know about it? Are they stupider than us? OP, use the most common methods, the problem is still you, not your wallet.

GreatArkansas

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Quote from: Russlenat on October 16, 2023, 02:08:51 AM

I think this article would answer that.

Why 92% of Institutional Investors Store Crypto on Exchanges

Quote

However, although things have improved since 2018 (the institutional crypto custody space now has well-renowned participants like Fidelity, Coinbase, and ICE’s Bakkt), a recent study conducted by Binance Research found that institutional investors don’t seem to be using these custody services; instead, 92% of the institutional investors that responded to Binance’s survey said that they prefer to keep their crypto exactly where most experts least recommend--on centralized exchanges.

As we can see, they place trust in major exchanges with the money entrusted to them. I can understand the reasoning behind this; an exchange that operates daily is more susceptible to hacking. The fact that they continue to operate reflects the effectiveness of their security measures. Additionally, I believe exchanges like Binance offer insurance on the funds deposited with them. In the event of a hack, which has occurred to Binance before, the SAFU fund, if I recall correctly, would come to the rescue.

This is totally making sense. These institutional investors are doing a lot of things so, they are just deligating their work to entities that really know what they are doing. If I am also in that position, I will do the same. Centralized exchanges have more knowledge of how to make it safe than these institutional investors, their Bitcoin could be put in to risk.

armanda90

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Firstly, for all institutional investors with huge investment decision investing in Bitcoin needed decentralized exchange for storing or purchasing bitcoin before sending to personal wallet if want hold there or keep hold in decentralize exchange market account. I think not problem for huge investor exactly institutional investors hold their assets in trusted decentralize exchange such as Binance will get guarantee their account secure, but hardware wallet could be the best option place more comfortable secure bitcoin assets.
As institutional investors have planning with long term holding I think put Bitcoin assets in hardware wallet more secure than decentralized exchange such as Binance, Huobi and Kucoin have good trusted reputation but depend not our key is not our coins when have third party controlling with our bitcoin assets.

GbitG

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Quote from: bitnote on October 16, 2023, 01:54:41 AM

How do institutional investors store and protect their Bitcoin assets?

Institutional investors store their Bitcoin assets in a place that they think is safe. But often, these institutional investors hold their assets, i.e., Bitcoin, as collateral on centralized exchanges. And I think it is up to the institutional investor to decide which place is safe for their assets. As for Binance, many institutional investors have kept their assets, i.e., Bitcoin, as collateral, which makes them completely safe because the security of exchanges is stronger than ordinary online wallets.

In my opinion, the best and most authentic thing that secures the assets of an institutional investor is a hardware wallet. In my view, this is one of the safest methods, and it is necessary for every person who has Bitcoin to buy a hardware wallet for himself and store his Bitcoin in it like institutional investors do.

ZAINmalik75

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Quote from: seoincorporation on October 16, 2023, 10:34:40 AM

I think cold wallets are the right way for big businesses to storage their Bitcoins, they should have hot wallets with the coins that they are using, but the ones that are just for holding would go on a cold one, which means they don't even have the private key loaded in a wallet, those are address with coins and with a private key on a safety box.

If they hold a big amount in the hot wallet that means they are risking those funds which is not a wise move. A good example was the hack on Stake some weeks ago.

You can count the Coinex hack too, because they also lost their funds because the keys were gone. But it was their own fault, even though they were storing the funds of the customers in a non-custodial wallet, meaning in a wallet where keys were owned by them, and they still lost the funds. Which means, custodial or non-custodial, it does not matter if you are being too lazy and unprotective of the keys.

Many companies use hot wallets for trading, sending, and receiving purposes. In simple words, they store those BTC in hot wallets that are to be used in the future, while the ones they plan to hold are placed in cold wallets. They will definitely be using other security layers like multi-signatures, 2FA, and isolated hardware wallets.

Many will say the secure way is to remain offline as much as you can, and for that, keep your keys stored on paper and not write them on online storage, where they would be vulnerable to hacks. But another will say to keep the paper comprised of keys, some of which are saved, so that no one can get access to them. And also keep them safe from natural disasters or wars.

Cryptomultiplier

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Quote from: seoincorporation on October 16, 2023, 10:34:40 AM

I think cold wallets are the right way for big businesses to storage their Bitcoins, they should have hot wallets with the coins that they are using, but the ones that are just for holding would go on a cold one, which means they don't even have the private key loaded in a wallet, those are address with coins and with a private key on a safety box.

If they hold a big amount in the hot wallet that means they are risking those funds which is not a wise move. A good example was the hack on Stake some weeks ago.

Cold wallets is what I was thinking because the bitcoins will be huge and unused for a while just like the way Elon Musk had to sell his crypto sometime in this year. I don't think he had direct access but perhaps with his brokers or safely stored in a cold wallet or if he did, it wouldn't have been stored with a hot wallet or using a wallet on any exchange.
I also agree with the fact that the crypto is insured hence why big institutional investors have the faith of leaving their funds with the exchange.

carlfebz2

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Quote from: bitnote on October 16, 2023, 01:54:41 AM

How do institutional investors store and protect their Bitcoin assets?
Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

Totally depends but speaking about institutional investors and corporation or with some individual billionaires then its been answered on the next comment or post next to this post on which majority of them would really be just storing it on exchangers which we know that its never been that recommendable on doing so but the fact that they are here just for the sake of profit then storing it up on exchangers would be the fastest way on executing some sell on the time that they would really be tending to scalp out some profits on their investment rather than on actively be transferring it out into their hardware or non custodial wallet
but of course not all would really be that so dumb on doing such action yet we know on whats the risks on storing up your assets on centralized platforms.

Whatever the things that they've been doing then its their choice and its impossible that they arent really that aware of the risks considering that these fellas are already that veteran on investment
world and with those security issues and concerns should really be that darn pretty basic for them and they are surely aware of that.

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Quote from: bitnote on October 16, 2023, 01:54:41 AM

How do institutional investors store and protect their Bitcoin assets?
Institutional investors, such as hedge funds and corporations, have different ways of storing and protecting their Bitcoin assets than typical user wallets.

Well, if you are asking what wallet institutional investors use for holding purposes, then they obviously have the following priority.. Non-custodial->Hardware wallet. This means they will obviously go for noncustodial wallets, and then go for cold wallets like hardware wallets. Or maybe air-gapped wallets. And they might not store all the BTC in one place.

Well, if you are asking what wallet they might be using for trading purposes, then they use custodial (exchange wallets) for trading purposes. Mostly these big institutions do OTC trading, which I think can be done directly from non-custodial wallets as no exchange is being used there so they don't need to use custodial wallets.

In general, the most secure way is to use a hardware wallet, or air-gapped wallet, or a paper wallet, but the paper wallets are not considered as more secure than multi-sig hardware wallets.

seoincorporation

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I think cold wallets are the right way for big businesses to storage their Bitcoins, they should have hot wallets with the coins that they are using, but the ones that are just for holding would go on a cold one, which means they don't even have the private key loaded in a wallet, those are address with coins and with a private key on a safety box.

If they hold a big amount in the hot wallet that means they are risking those funds which is not a wise move. A good example was the hack on Stake some weeks ago.

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