FASCINATING! So, all along you thought that the bitcoins you own are in your “wallet”. BUT, where is your wallet? Turns out it may be in the Swiss Alps. No really, IN the mountains. Like in an old Swiss military bunker in a super secret place. Talk about security, Xapo is the firm behind this cryptocurrency hiding place and they have designed cryptographic keys as a safe and secure layer of protection. Pretty cool actually. So, hiking in the Swiss Alps could turn into a treasure hunt. (Keep this to yourself, but Jamie Dimon’s password is ‘fraud’)
“I’m being driven along the eastern shore of Lake Lucerne when my guide points out our destination. “The bunker is in one of those mountains,” says Maxim Kon, gesturing at a fog shrouded peak on the opposite shore as he pilots his BMW convertible.
Kon is taking me to see one of the vaults where Xapo, the company he works for, stores its customers’ bitcoins. It’s no ordinary vault: I’ve been told it’s inside a decommissioned Swiss military bunker dug into a granite mountain. Its precise location is secret, and access is limited by security measures that would put a Bond villain to shame.
Kon won’t tell me how much bitcoin is stored in the vault, but he says he sometimes takes customers with “millions” of dollars worth of the cryptocurrency stored with Xapo to tour the vault. It’s odd to think of a virtual currency needing physical storage, but just like your most precious photos, even a cryptocurrency needs some kind of material container. Xapo’s founder is the Argentinian entrepreneur Wences Casares, the “patient zero” of bitcoin among Silicon Valley’s elite. It was Casares who gave tech luminaries like Bill Gates and Reid Hoffman their first bitcoins.
A bitcoin vault doesn’t store actual bitcoin units. Technically, what’s being stored are private, cryptographic keys. These keys form a pair with particular, public-facing, keys and provide access to the balance of coins stored on the bitcoin network. Gaining unauthorized access to someone’s private keys is akin to making off with a gold bar.
Stories of hackers finding their way through even the best secured accounts are legion, and it’s ironic that bank-like methods have to be used to keep cryptocurrencies safe. If someone gets hold of your private key, there’s no way to claw the funds back or demand a refund. That’s why a firm like Xapo that stores bitcoin is a juicy target for hackers—and why it requires paranoiac levels of security…”
Full Story at Weforum.org