MicroStrategy Announces over $1B in Total Bitcoin Purchases in 2020 | Hacker News Reader

MicroStrategy Announces over $1B in Total Bitcoin Purchases in 2020

microstrategy.com

9 pointspartingshots11 comments

At an average purchase price of $15,964, I think they'll do fine in the long term.

I always wonder how they manage that much money in cryptocurrency. Do they keep all of it in a single wallet ? Is it split in several smaller wallets ?

Hardware based wallets kept offline until needed I suppose. Makes me wonder where banks keep their money...

There are special services by Coinbase and other brokers alike for this.

If such a service loses your coins, you could sue the service. But the service will likely be bankrupt.

I assume nobody would want to insure such a large and unknown risk...

The funny reveal about bitcoin is that it is literally impossible to have a 100% safe way to store them. If you have them, you could lose them, if someone el se has them, they can be stolen, etc etc.

But these services are no joke. Xapo had repurposed a former military base in the middle of the swiss alps, with special vaults and security procedures. I'm talking about tens of millions spent in resources and human ingenuity to keep this safe.

The funny reveal about bitcoin is that it is literally impossible to have a 100% safe way to store them.

This isn't accurate. The gold standard for bitcoin is using multisig, where multiple (m of n) keys are required to access the bitcoin.

For example, anyone can setup a 3 of 5 multisig which requires 3 of the 5 keys to spend or move the bitcoin. These keys would be stored in separate hardware wallets stored in vaults anywhere in the world.

In the case of MicroStrategy, one could imagine them using multisig, so that if Michael Saylor dies in a tragic boating accident, board members of his company would be able to access the bitcoin the company owns.

Multisig has been available almost since the beginning of bitcoin but only recently became more mainstream as the value of bitcoin continues to increase.

[1] https://en.bitcoin.it/wiki/Multisignature

[2] 10x Security Bitcoin Guide—https://btcguide.github.io

> These keys would be stored in separate hardware wallets stored in vaults anywhere in the world.

Nothing is 100% safe. If 3 of those locations are compromised the bitcoins would be lost permanently. Also its a very inaccessible way to store bitcoin, and not scalable for all use cases.

Also its a very inaccessible way to store bitcoin, and not scalable for all use cases.

It depends on how much money someone is holding. It's certain more secure than a single password on a banking site and your mother's maiden name.

Multisig allows for a possible catastrophic incident to occur—a fishing attack, a security vulnerability with your bitcoin wallet, loosing your pin, etc—and not lose your money.

A 2 of 3 multisig is something tech savvy people could easily do with a hardware wallet, a smartphone or computer and a safe deposit box, for example.

If you're a multinational corporation with over a $1 billion in bitcoin like MicroStrategy, it may make sense to have keys in different parts of the country or in different countries, especially if your adversaries are state level actors.

I assume nobody would want to insure such a large and unknown risk...

You're kidding, right? With billionaires, publicly traded corporations, hedge funds and insurance companies investing in bitcoin (or using it as their treasury), there's a whole new crypto financial industry emerging.

For example, Knox: https://www.knoxcustody.com

    Bitcoin custody that is insured to the full value of
    holdings for the risk of theft and loss, including
    collusion.

Offline wallets plus a private security team should be justifiable given how much is at stake. The physical security aspect would actually be not so expensive since a small room could store all the bitcoin in the world.

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