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Comment by sillysaurus3 | Hacker News Reader

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sillysaurus3

By the way, you really think Coinbase's BTC is insured even after the massive gains in BTC's price?

What do you think will happen if Coinbase's cold storage gets emptied?

If you're storing your coins on Coinbase, you're doing it wrong. Get your coins under your control.

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> If you're storing your coins on Coinbase, you're doing it wrong. Get your coins under your control.

And what if you lose the USB key, hard drive, etc or it becomes damaged? Oops.

Secure and reliable storage is a problem that must be solved.

just encrypt your btc keys with another secret key(symmetric key e.g. aes, blowfish or something else). Store them on different cloud providers, encrypted btc keys on google drive and the other secret key (password protect it) then store it on one drive or icloud or private repository on github. The hacker must hack both sites to take your keys(very unlikely to succeed) and they are both securely stored online. Also make sure you're not using the same password for both sites :)

The attacker only has to hack your email account then reset the password on the two target sites...

And then all they have is an encrypted file assuming good password hygiene.

So then why not just email the keys to yourself and leave them in your inbox?

Hardware wallets work by giving you a 24 word seed to recover it if lost, stolen, or broken.

People store them in safety deposit boxes or do a variety of security rituals to keep them safe. It's not as difficult as you make it out to be.

Yes! 1000x yes.

If Bitcoin price tanks, it is 100% certain that Coinbase will either go down, or will lack requisite fiat. Better to have Bitcoin in your own wallet, and have more options to exchange for other cryptocurrencies.

The parent is commenting on coinbase’s ability to keep bitcoins safe.

It is basically not possible for coinbase to “lack requisite fiat” as the requisite fiat to run an exchange is zero. Coinbase simply matches buyers and sellers. Not sure how a price crash would change anything.

FWIW this applies to any coins you don't personally hold the private key for not just BTC on Coinbase.

He who holds the keys holds the coins.

Bingo. Because the keys are the coins.

Some of it is insured (but unclear whether that includes cold or just hot funds).

My real question is how the insurance is denominated. Does it pay out in dollars or bitcoins? Did their insurance premium just go up 10x?

  All digital currency that Coinbase holds *online* is fully insured.

The way they word it, only their hot wallet is insured which is ~<2% of holdings. They definitely like to make it confusing.

https://support.coinbase.com/customer/portal/articles/166237...

Indeed, no mention of insurance on the offline storage page: https://www.coinbase.com/security?locale=en

seems unlikely

imagine the premiums

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