Coinbase Moves Investors Funds to the Tune of $5 Billion in Crypto Assets For Upcoming Token Expansion
Coinbase, as you probably have seen news about, is set to expand the number of tokens that the company is offering. Because of this, the exchange has made a considerable effort to significantly expand how it safeguards its assets. Now, the company has decided to move $5 billion USD in cryptos into an “upgraded storage model”.
This new storage unit will contain 5% of all the Bitcoin (BTC), 8% of all Ether (ETH) and 25% of all Litecoin (LTC) in circulation today, which are most of the assets held by the company at the moment.
According to Phillip Martin, the head of security of Coinbase, the process was planned for months. It was a fundamental change in the infrastructure of the company and it radically changed how the money was being kept.
Creating the structure from the ground took some time and many auditors and regulators were involved in this huge process. This, according to Coinbase, will make the money considerably safer, which will impact the company in a very positive way.
Everything began with the key generation process for the keys of the assets. The Coinbase team first secured a location for the new computers and then went to print out the keys. After that, the keys were split up for safety reasons. Now they are in a format that can be used in scannable QR codes and well protected.
They applied a cryptographic technique called Shamir’s Secret Sharing to protect the documents and used an algorithm to protect the data. The money will be divided via many secure locations with lots of encrypted keys and kept in cold storage. This is all made so that the company can grow now without being too worried about being hacked and having a considerable loss.
As many companies did not take these necessary precautions before, it is, unfortunately, not hard to see companies that did not take the necessary precautions. Mt Gox, Coincheck and others were all victims of hacking. An event of the sort could bury Binance or Coinbase and have a huge impact on the market now, so the companies are getting smarter on how to safeguard their assets now.
The Time For Expansion
Everybody knows that the main reason why Coinbase is doing this now is to expand even more. The plans that the company has for 2019 are very ambitious indeed and being protected is a key for that.
With this huge improvement on its cold storage, Coinbase now has cleared the road for upgrading the company in the future. According to Martin, you simply cannot change things as you go when your company is already too big. It’s too expensive, complicated and it can cause severe security breaches.
Now, Coinbase is doing a change to last for a long time and the main goal of the company is to be sure that they will be able to expand at the same time that their assets are as safe as possible.