Securing Bitcoin & Other Cryptos
You can’t pick up a paper or watch a news program without a story on Bitcoin at the moment. The last few days have seen it take off to new highs and seeing calls of an imminent $10,000, just as Michael Novogratz called recently, albeit well ahead of his year-end target.
Some of the news included 2 properties in Australia, one in Melbourne and one in Far NQ, that have just been listed with payment accepted in Bitcoin. As a medium of exchange, a fundamental of money, bitcoin is becoming more and more widely accepted. We of course offer bullion for sale with settlement in Bitcoin, Litecoin, Ethereum, and Ripple.
Reports of Korea’s second largest bank, $192b Shinhan, announcing it was testing its own bitcoin vault and wallet service for clients contributed to the USD price of bitcoin surging over the $9500 mark.
This news reinforces the need to safely secure your crypto currency as people quickly find themselves sitting on extraordinary values in these currencies. Too few people fully appreciate the danger of holding their crypto in so called ‘hot wallets’ or on exchange accounts. Whilst the blockchain presents a virtually unhackable store of wealth, that is only as good as the security of your private key. All ‘hot wallets’ are effectively exposed to the internet and hence the threat of hacking. So too ‘cold wallets’ are only secure if the private key is kept secure. In this sense a cold wallet is like a bar of gold, leave it unsecured and it can be stolen without recourse. To complete that analogy, ‘hot wallets’ are akin to ETF’s or Futures where you introduce counterparty risk to your asset.
Whilst Shinhan’s move to provide cold storage is potentially one solution Ainslie customers already have that solution available.
Our storage accounts see your allocated unique offline wallet stored securely in Reserve Vault, a high security vault in Brisbane, and one of Australia’s largest. Likewise customers taking their own ‘cold’ Ainslie Crypto Wallet with them can easily get their own Extra Small Safe Deposit Box at Reserve Vault for only $230/year. If you had just one Bitcoin worth around AU$12,000 that is less than 2% per year for complete peace of mind. That smallest Safe Deposit Box takes up to 2kg so there’s plenty of capacity to put other valuables in with that wallet. 2kg of gold is over $110,000 worth! A portable hard drive of family photos… priceless….
This year alone Bitcoin is up 860%, Ether up 5300% and Litecoin up 1880%. As crypto’s soar don’t forget that critical piece of how you secure them.