Just recently, Coinbase managed to move, what they claim to be, the largest crypto transfer ever recorded. They published this announcement in their blog.
“To our knowledge, this is the largest movement of cryptocurrency (certainly in USD terms, potentially in absolute terms) ever undertaken,” they write.
According to the article, Coinbase moved 5% of all Bitcoin (BTC), 8% of all Ethereum (ETH), and 25% of all Litecoin (LTC) in the market. Also, along with this party, “many other assets” contained this significant transfer. Altogether, that sums up to be around $5 Billion. They report this was an on-blockchain transfer.
New storage systems
Coinbase moved these assets from a Generation Three to Generation Four of cold storage infrastructure. The Generation Four infrastructure begins with a “highly controlled and audited key generation process and continues with a globally distributed key storage and transaction approval system.”
Further, they elaborate on how Coinbase has solved cold storage issues over time. For example, their first interpretation of cold storage, back in 2012, was multiple keys in a safety deposit box. That was fine at that time. But “as asset values increased and cryptocurrencies started to diversify, we needed to build a system that ensured broad consensus on movements from cold storage and could flexibly support many types of assets.”
Coinbase is a large company that holds a lot of investors money. They have to evaluate all the risks that might be occurring. Coinbase says that early in the process they identified a few possibilities that might be happening. One of them, according to Coinbase is, “the potential for our migration to be mistaken for an exchange breach or a large trader preparing to sell a significant amount of cryptocurrency. Either way, we were worried that the market uncertainty would result in price movements.”
They also predicted that hackers might plan for an attack during the migration if Coinbase would give out too much notice.
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