Xapo Bank, one of the pioneers in holding Bitcoin, is using multi-party computation (MPC) technology to store private keys in nuclear bunkers in the Swiss Alps, to protect the safety of customers' Bitcoin assets.
It is estimated that around 2 million Bitcoins have been lost and cannot be recovered due to issues related to personal storage management. Therefore, choosing a safe Bitcoin storage method is a top priority for many investors.
Some people take the risk of storing Bitcoin on exchanges, while others opt for cold storage. However, Xapo Bank, a pioneer in the digital asset space, offers a unique storage solution by protecting customers' Bitcoin in highly secured nuclear bunkers in Switzerland.
According to Cointelegraph, the bunker is built to military standards, with multiple layers of airtight hatches, nuclear blast doors, biometric identification systems, and other stringent security measures.
Accessing the MPC repository requires passing multiple layers of rigorous security checks, including ID checks, retinal scans, constantly changing access codes, and other complex authentication processes.
The most important vault door leading into this facility weighs 6 tons. Source: Xapo Bank Multi-layered security with MPC technology
Xapo's chief information security officer, Andrew Mannoukas, said the bank's multilayered security measures make it nearly impossible to seize the bank's Bitcoin. Xapo Bank uses MPC technology, in which private key fragments are distributed across multiple secret locations around the world and managed by independent organizations. Each organization holds only a portion of the key, and no one knows where the other fragments are.
Mannoukas describes the MPC signing process as multiple experts contributing key pieces of data to a secure system without revealing their contributions to others. When these pieces of data are combined, they create a valid signature to execute a transaction. This method ensures maximum security, preventing any individual or organization from holding all of the private keys.
Xapoâs bunker facility does more than just store MPC pieces. It also provides a number of other services. Built in the 1980s in collaboration with the Swiss Air Force, the nuclear-proof facility is equipped with two 1-megawatt diesel generators, an advanced HEPA air filtration system, and an underground lake that cools the server systems without the need for energy-hungry air conditioning.
Two 1-megawatt diesel generators automatically start up in the event of a power outage, providing the facility with a powerful backup power source. Source: Xapo Bank
Xapo Bank has switched to using MPC signatures to secure Bitcoin in 2023, replacing the previous multi-signature (multisig) process. MPC technology eliminates the need for security guards to manually perform daily transactions between hot and cold wallets, improving security and efficiency.
Although the cost of maintaining the above security system is in the millions of dollars per year, it is one of Xapo Bank's main attractions. Customers are willing to give up the responsibility of managing their own assets in exchange for the absolute security that Xapo Bank's advanced technology and infrastructure provide.
Also this month, Xapo Bank and Hilbert Group partnered to launch the Bitcoin Yield Hedge Fund with an initial investment of $175 million (equivalent to 3,000 BTC). The fund, called BTC Byzantine Xapo, is designed to provide institutional-grade returns to Bitcoin holders. The fund is expected to launch globally on January 1, 2025, subject to regulatory approval.
