To securely store cryptocurrency, Coinbase buys a vault under a mountain in Switzerland The budding blockchain behemoth Coinbase bought a company called Xapo’s “custody business,” which stores Bitcoin securely in a vault under a mountain in Switzerland, for $55m. After the deal closes, Coinbase will have more than $7B in crypto assets under management -- potentially storing as many as 5% of all Bitcoins in circulation. But wait a second… why, exactly, does a crypto company need a physical vault built underneath a Swiss mountain? Digital currencies still need physical custodians Unlike wire transfers at banks -- which leave digital trails and can therefore be recovered when stolen -- blockchain-based transactions leave no trace... and are therefore nearly impossible to trace. So the safest place to store crypto keys -- strings of letters and numbers used to access cryptocurrencies -- is not online (where they can be hacked without a trace) but in offline, IRL vaults. Now “custodians” like Xapo, which offer physical vaults that consumers want to store their crypto-cash safely, are becoming common. And these Bitcoin vaults have something to prove Crypto companies are focused on attracting institutional investors who’ve been reluctant to trade cold, hard cash for digital dollar-replacements. One way to win over wary wealth-managers is to make these custody services seem suuuuper secure -- so, the more they look like evil supervillain lairs from James Bond movies, the better. Xapo certainly fits the bill: The ultra-secure vault, which is built in an old Swiss military bunker, is hidden in an undisclosed location and protected from nuclear explosions, electromagnetic pulse (EMP) attacks.
Bitcoin is a distributed, decentralized, censorship-resistant network. It means everyone has a choice on how they use it. Institutional Investors have a need for centralized and regulated custodial ownership and that's what we're seeing as they choose to invest in this space and the companies that can provide the service are happy to do so (Coinbase/xAPO, Fidelity/FIDAS, Etrade, Ameritrade, NYSE/Bakkt) An individual who doesn't want any of that can choose to store or transfer value anywhere in the world without any centralized middlemen, outside of any sovereign state controls. What comes to mind is that a government is able to confiscate your "wealth" (i.e. civil forfeiture), but they cannot do so if you have bitcoin as they don't even know you have it.
Exactly, the entire idea of crypto currencies as it stands right now gets more ridiculous by the day. Now I am supposed to entrust my security key (essentially a password written on a piece of paper) to a company that has then access to millions such keys? How is that safe? It's screaming for abuse and the company can do nothing if a rogue employee steals some or all keys. And how am I gonna get my key when I need it? Pick it up in Switzerland? How much dumber can people be to believe in this lunacy?
Really? I think you did not understand the basic premises of block chain technology, which is that it is supposed to be decentralized. Yet you clowns try to sell the world the idea how important exchanges are, safe keeping vaults are, and all those other "value added services". In the end nothing about cryptos is actually decentralized. It's another get rich quick scheme for the operators of those information and exchange hubs.
I don't think you're serious about this, are you? How does that work, Google sends the info to IRS? Or the IRS will send a subpoena to Google on all US-based users with no SSN? So, your bank is on the lookout for all of your transactions and voluntarily sends the info to the IRS? Are you serious? Maybe the IRS sends a mass-inquiry again to the all the US banks for any related crypto transaction without providing SSN's as a scope/parameter? Did you even think before you typed that nonsense? Yes, as I said, Bitcoin is a decentralized, distributed, censorship-resistant network. If you choose to make transactions on centralized and regulated exchanges (i.e. Coinbase/Kraken) in-excess of the $20K in the past 3 years, you would have gotten a letter from the IRS. If you didn't, you would not have gotten the letter.