In Switzerland’s nuclear storage secret bitcoin storage
It seems far-fetched, but it's true. A vault in a secret nuclear repository in the Swiss Alps protects large amounts of Bitcoin.
Cointelegraph visited the facility to see how Multiparty Computation (MPC) shards stored in bunkers are using bleeding edge security for the world's first Bitcoin (BTC) banks.
Every Bitcoiner knows the phrase “your coins, not your keys”, but you can't keep hiding your hardware wallet or your pedigree under your mattress. With approximately 2 million BTC irrevocably lost, how and where to store your BTC remains one of the most challenging issues for digital asset owners.
It seems far-fetched, but it's true. A Secret Nuclear Vault in the Swiss Alps Contains a #Bitcoin Treasury Worth Over $100 Million 💵💵💵
I visited the site live on a personal invitation by @xapobankapp. Here's what I learned
🔒 The vault is protected by layers… pic.twitter.com/B8vTIfwtaf
— Gareth Jenkinson — Token2049 🦙 (@gazza_jenks) September 26, 2024
For some, keeping their BTC on an exchange is a risk they are willing to take. Others move their Bitcoin to cold storage.
Those comfortable enough to entrust their BTC to a third party can opt for the services of industry first movers such as Xapo Bank, which uses a series of underground bankers to protect its customers' Bitcoins.
Bitcoin's “Fort Knox”
“You have five more minutes, then I need you to hand over your phone,” said Albert Rocca, Xapo's senior HQ account manager.
As our helicopter entered the Swiss mountains, an ex-staff detective slipped our smartphones into an invisible bag. The inside of the bag is a Faraday tunnel, disconnecting our devices from any connection and making our surroundings undetectable.
The helicopter touched down on a small landing in the shadow of a sloping vista. At the base is a polished granite floor with a single military-style bunker door. It was the first of many hermetic vault doors that kept out the unknown secrets inside.
Entry to this cave involves a comprehensive security check. After verifying the ID and down, visitors are given a magnetic card that can be used to enter various points in the facility.
The first major barrier to entry is the six-ton vault door, designed to withstand a nuclear blast. The guard scanned his retina and entered a code that was updated every minute before the giant door slowly opened.
The most important vault door to the facility weighs six tons. Source: Xapo Bank
Our group moved to a smaller area with another barrier. In this case, a man trap fence with bulletproof glass on both sides is used to measure the weight and height of visitors. This biometric information is linked to a magnetic card that identifies you as you move around the facility.
Finally, we entered the terrace and encountered an exposed rock tunnel about 30 meters away; This led us to the next set of security gates. This point requires the participants to perform a specific movement to pass, which is another obstacle to avoid unwanted guests jumping from the bamboo.
The terrace is one of the few dry ones in Switzerland, which means that parts of the corridor are painted on the exposed stone. Source: Xapo Bank
Behind this door is a corridor with vaulted doors on either side. Our escort headed for the door to the Zapo Bank vault.
Andrew Mannukas, Xapo's Chief Information Security Officer, is one of the few who has access to the inside of Vault. During this visit, his certificate was revoked to prevent him from being taken hostage and forcibly surrendered to us.
A small section of the bunker houses several infrastructure services protected by biometric scanners. Source: Xapo Bank
Behind the last door is an MPC slip, one of a number stored in vaults around the world. Signing transactions is required to manage Xapo Bank BTC holdings.
According to Mannoukas, the number of redundancies maintaining the infrastructure would make it impossible for an attacker to control the bank's BTC.
“Why the vaults? It's all about defense in depth. The physical security—those military-grade bunkers—add another critical layer of protection. It protects against insider threats, natural disasters and physical theft attempts,” Mannukas explained.
Xapo shards are globally distributed in unknown locations and are owned by various entities whose exact location is unknown.
This geographic distribution is designed to ensure that no single individual, organization, or entity has access to all shards, as doing so would effectively control the entire private key.
Bunker is ready for everything
Xapo Bank Vault is one of the many services that are kept in the secret vault. The owner, whose identity has been withheld to protect the site's security, acquired the facility in the 1980s in partnership with the Swiss Air Force.
Now independently owned, the Labyrinthian Bunker contains all kinds of infrastructure, equipment and assets.
The facility maintains all of its nuclear-proof features. It houses two one-megawatt diesel generators and a sophisticated HEPA air filtration system that removes pollutants, including toxins and radioactive particles.
Two one-megawatt diesel generators automatically start in the event of a power outage, giving the facility a powerful backup power source. Source: Xapo Bank
It also uses an underground lake to cool server rooms and other facilities, eliminating energy-intensive air conditioning systems.
Various bunker rooms have high security certifications. Access to a hidden emergency exit requires permission from a remote security service. The tunnel is equipped with a timer and local green lights illuminate the passage at the designated time to cross.
The enclosure has several hermetic doors that break off entry points to various parts of the facility. Source: Xapo Bank
Another six-ton gate guards this entrance. The entry point still features a military-era defense – a small chute that allows a guard to throw a grenade into the corridor outside. Canoeing is a truly immersive experience. It combines decades of Swiss bunker construction with modern technology and infrastructure.
Multisig switching to MPC
Xapo Bank withdraws from multi-signature agreement to secure bitcoin holdings in 2023
The company It has used these bunkers since its inception in 2013, and the multi-sig process involves custodians manually completing daily hot and cold wallet BTC movements.
MPC technology has made this obsolete. Homomorphic encryption completely eliminates the risk of exposing private keys, adding an additional level of security assurance.
Related: The European Central Bank is exploring blockchain and MPC technology
Mannukas explained MPC's signature process of a team of chefs cooking together, each chef having a secret ingredient.
The cooks add their ingredients to the pot without showing each other. They put the pot together by following a special recipe that mixes everything properly. In the end, everyone tastes the final dish, enjoying the combined flavors, but no one knows exactly what others have added.
“This is similar to what MPC does, where each participating shard (MPC shard) contributes its own share without revealing the signature, and when combined, they create a valid signature to sign the transaction.”
In this way, the group can securely authorize the transaction without any person or entity possessing the complete private key or collecting the private key.
No expense has been spared to achieve this level of safety. The bankers spend millions of dollars a year just to use it.
Combined security measures remain one of Xapo's main drawcards. Its customers have relinquished self-regulatory responsibility in exchange for technology and infrastructure that most modern banks do not employ.
Disclaimer: Cointelegraph was personally invited to visit Xapo Bank's warehouse, and the company covered his travel and accommodation expenses.
