The recognized crypto platform Coinbase moved 5% of all Bitcoin supply in a mega transaction to a new wallet. According to the exchange, the intention was to protect their assets using a next-generation hardware wallet. 8% of all Ethereum (ETH) and 25% of all Litecoin (LTC) have also been moved. The information was released by the company a few days ago in a blog post.
Coinbase Moves 5% of Bitcoin’s Supply
In the last few years, several hacks and attacks have affected different exchanges in the market. Perhaps, the most important attack was experienced by Mt. Gox a few years ago. Recently, Coincheck was hacked losing $500 million in NEM (XEM) tokens.
Earlier this month, Coinbase moved 5% of all BTC, 8% of all ETH, and 25% of all LTC in circulation to our next-gen secure cold storage. Here’s how we did it. https://t.co/8TJ6S97BnW
— Coinbase (@coinbase) December 19, 2018
Exchanges are usually attacked by hackers since they own several virtual currencies in just a few wallets. As virtual currencies evolved, hackers improved their tactics and were able to have better performance. According to Eric Larcheveque, each day $2.7 million is stolen from cryptocurrency exchanges. That means that $1,860 is stolen per minute.
Coinbase wants to improve customer services by providing better security. The exchange takes care of the most important asset they own, the customers’ assets. This is why Coinbase is currently storing 98% of its funds in cold storage wallets.
On the matter, Coinbase wrote:
“At Coinbase, our commitment to security is expressed in a number of ways, from consumer security protections to internal development practices to third-party audits and tests. Our most critical responsibility is the security of the assets that our customers entrust to us.”
According to the company, they moved $5 billion in assets from Generation Three to Generation Four cold storage infrastructure. They say that this might have been the largest movement of cryptocurrency ever undertaken – at least in USD terms.
Coinbase believes that in order for an asset to be secure, it must involve several individuals to perform a physical transaction. Once the physical individuals verify the information in a transaction, they can confirm it or not. The first cold storage wallet that the company had were keys in a safety deposit box.
However, moving $5 billion in assets was not an easy task. The company emphasized that they required months of preparing this transaction and it involved almost every team at Coinbase.
“We began planning months before the actual move date and involved almost every team at Coinbase in the process. We conducted risk assessments, honed monitoring plans and conducted test migrations until we were positive that the live migration would go off without a hitch.”
One of the main worries that the team at Coinbase had was related to the potential effect of this transaction on the market. The move could be mistaken for an exchange or any other trader that could be ready to sell an important amount of money. In order to provide information to the market about this transaction, Coinbase wrote a blog post.
The migration took four days and it was completed properly without any major issue.