Bitcoin wallet Xapo is giving everyone free access to its secure offline storage today. And, rather than going underground, Xapo is looking to space for its latest security updates.
Previously, Xapo charged an annual fee to keep Bitcoin in its secure offline vault, also known as deep cold storage. That fee was not steep, but still a barrier at .12 percent of funds stored. Now, users who have already paid the annual fee will get a prorated refund. In addition to free storage, Xapo is taking its already secure network to a new level — space.
Known for storing customers’ Bitcoins in offline servers buried deep inside a mountain in Switzerland, Xapo is rolling out a new security measure using satellite technology. The low orbit satellite holds a piece of immutable data, something the company knows can never change. CEO Wences Casares tells me that you would have to physically get to the satellite to tamper with the information. The data is there as a way for the company to make sure no one has hacked their network on the ground. If there’s a change in the way the satellite communicates with Xapo’s network, it’s an indication that Xapo may have been attacked.
The company is also extending its multi-signature addresses, which require that three out of five private keys validate a withdrawal request before money is released, to all wallets. The private keys reside in offline servers and never come online — making them very difficult to hack. Xapo also recently had its security controls and processes reviewed by an independent authority under what’s called a “Service Organization Control 2” audit. Xapo says it’s the first Bitcoin company to undergo an audit.
So why all these crazy security protocols? In the past Casares has noted that his extreme security measures are what allow his wallets, and the coins therein, to be FDIC-insured. This is just one more measure to help keep his wallet service from turning into a Mt. Gox-level fiasco.
“I strongly believe that Bitcoin volatility isn’t a bad thing,” he says. Rather he thinks that the fluctuating value of the cryptocurrency prevents people from putting their entire life savings in Bitcoin. Casares says people are hoarding and experimenting with Bitcoin in healthy ways — like wading into a deep pool.
But in order for Bitcoin to eventually stabilize, it’s going to need a larger user base. That’s part of the reason Casares removed the fee from Xapo’s vault services. He thinks it might have stopped people from taking advantage of the company’s deep cold storage. Ultimately he thinks everyone deserves to have access to this technology.