Billionaires bury their bitcoins in bunkers: They hide billions in the mountain

Xapo has built a large network of underground bunkers that contain bitcoins, including a military bunker in Switzerland

Behind heavy doors and concrete tunnels are hidden computer servers, connected to nothing, in which there is a 'key' of vast digital wealth. Argentine entrepreneur Wences Casares spent the past few years persuading billionaires and millionaires from the Silicon Valley that the bitcoin is the currency of the future, which they too should have, and that the best man for her care is exactly what he is. Its start-up Xapo has built a large network of underground bunkers, vaults, to store bitcoins on five continents, including one located in the former Swiss military bunker.

Xapo is renowned for its long list of clients and great security concerns, but it's even more familiar - how much digital money is in their bunkers? Their clients will say that it is about $ 10 billion in bitcoin , but it's hard to know its true value, since the price of bitcoin varies. In their hands, there is a key for about seven percent of the world's bitcoin market. This is an extraordinary figure for the 'old' company for only four years, which according to these estimates has more than 98 percent of the 5,670 banks in the United States.

The world's 'love' keepers have a special regulation. Their Swiss business oversees the Financial Services Standards Association, which checks members to find out if they are in line with their stringent anti-money laundering rules. The service was also provided to American clients through a Delaware corporation registered with the US Treasury Department's Financial Crimes Enforcement Network and licensed in several countries. The trust is Casares - an entrepreneur known for the nickname "Patient Zero" who has instigated the interest of the Silicon Valley for bitcoin - earned among its followers and large investment companies such as Grayscale and CoinShares.

"Those who do not have the keys to digital wealth themselves have handed the keys to the Xapa. There is no money to keep him in the bank, " said Ryan Radloff of CoinShares, who in his vaults hides more than $ 500 million worth of bitcoins. The list of their supporters, billionaires, includes LinkedIn, led by their co-founder Reid Hoffman and former Wall Street dealer Mike Novogratz, who is currently in the process of creating his trading crypto bank. They predict that the bitcoin will remain there forever, and their biggest fear is - its theft.

The first and possibly the most important rule for owning a bitcoin is to provide a private key in particular - a code that allows the use of bitcoins. If the key is picked up by the thieves, at the moment you can stay without it, and the chance that your stolen bitcoins will be returned are almost none. If your key is connected to an Internet-connected device, although it's very practical, it's actually very risky because the hackers have proven to be very resourceful and will get data without any problems. The most popular alternative is a 'cold storage', whose key is on an offline device - the USB stick. But the risk remains, crafty hackers are able to put traps on the computer to ensure access to 'storage', right at the point of connecting to the Internet, Bloomberg writes.

Some criminals have turned to the traditional approach to robbery, which includes breaking and abducting. Just because of various security issues, wealthy owners of bitcoins hide their identity, enhance the security of their homes, and even train a kind of self-defense. Xapo offers a solution to store valuable bitcoins deep in the foothills of the mountains with a strong safety net. "They are the first to recognize the importance of the role of guardianship and security functions," said Hoffman, whose investment firm Greylock Partners in Xapo invested $ 20 million in 2014, just a few years after Casares urged him buying the first bitcoin.

In Xap it takes about two days to get the bits out, and the process involves checking the client's identity and authorizing the request before transactions with private keys from different locations are approved. In order for the transaction to be authorized, approvals are required from three different parties. The company also offers its customers the opportunity to sell and buy bitcoins and have created the first debit card for spending.

The 44 year old Casares attracted great media attention, but elegantly avoided any major interviews. His power of persuasion is legendary and has expanded his influence both in financial and banking circles. The advisory team also includes former Secretary of the US Treasury Department Larry Summers.

But not everyone was so easy to accept Xapo. An example is the Canadian first registered crypto company, First Block Capital, which Xapo chose after months of negotiations, and after visiting their vault in Switzerland.

"Every part of their DNA is safely equipped," said Sean Clark, founder of this Canadian company. He emphasized that the security system in the vault also includes fingerprint scanners equipped with a pulse reader to prevent the use of e.g. amputated hands.

It is precisely the lack of an institutional solution for storing and securing bitcoins one of the major problems this area and its owners encounter. But Xapo has already offered a solution to this problem.

Casares's mission is bitcoin. This Argentinean was born at the sheep farm in the Argentinean Patagonia region, and from the earliest he experienced the power of inflation on his skin. It was precisely financial insecurity that prompted him to establish a series of financial and technological startups that had been secured by millions and before he began to engage in bitcoin.

He sold 75 percent of Patagonia, the Latin American financial web portal, $ 529 million in 2000, and the digital Lemon for $ 43 million 13 years later, all in order to focus on crypts.

And then he was already a big bitcoin owner. In Bitcoin immensely believes, as he says.

The success of bitcoin over the past few years has led to the development of their competitive currencies, such as Ethereum and Ripple, whose value is also estimated in billions. But Xapo only keeps bitcoin precisely because of Casares's faith that he alone can succeed. And because of that, Xapo regularly rejects other potential customers. Other critics say that Xapo has no place in the bitcoin ecosystem and slows down a process that should be casual and fast."We are discussing this issue a lot, and we believe that bitcoin will not become part of the" manstrians "if people have to keep their private keys. It's not easy to be my own bank with a lot of security measures, "Rogers said.

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• 17 May, 2018
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