Coinbase Expands Bitcoin Offline 'Cold Storage' to 97%

Coinbase Expands Bitcoin Offline 'Cold Storage' to 97%Securing bitcoins offline, often referred to as “cold storage”, is a rapidly spreading service that startups in virtual currencies are offering, just as the mainstream credit industry is grappling with massive security breaches led by the theft of data at Target stores affecting at least 70 million customers.
While credit card data theft has no direct connection to bitcoins hacked from digital wallets, cryptocurrency players are taking action to prevent similar disruptions in their fledgling industry.
The most successful Silicon Valley bitcoin startup, Coinbase, Wednesday said it has increased the percentage of its bitcoins stored offline to 97 percent of funds, up from the previous 90 percent.
“The exact amount changes on a day to day basis, but this additional layer of security is important to use as broadly as we can,” writes Coinbase in its latest blog post.
Coinbase offers a bitcoin wallet, buying and selling of the virtual currency and a mechanism for merchants to accept bitcoins as payments. Coinbase is also looking to developers for broader bitcoin applications.
However, providing secure storage of bitcoins “is one of the most important products we offer at Coinbase,” the startup states.
Coinbase say it has initiated a “key splitting scheme” and distributed the shared pieces to various safe deposit boxes and vaults around the world.
“This ensures that keyholders are never geographically located in the same place during the course of normal events, so there can’t be a single point of failure for compromise,” Coinbase says.
Coinbase has also initiated two-factor authentication (2FA), with most users already having a phone added to their account, giving them another layer of security beyond the standard password layer. Users can be emailed or texted after logging-in the normal way.
To guard against someone access a Coinbase member’s computer — say when you walk away from your desk without locking the screen — the company now requires 2FAs when more than a certain amount of transactions take place in a single account per day.
“For example, if you try and send more than $100 worth of bitcoin in a 24 hour period, you will now be asked to enter your two factor verification code,” Coinbase says.

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