Coinbase’s Cold Storage Shifted From USB Drives to Key Ceremonies

Coinbase’s cold-storage procedures progressed from offline USB drives and paper backups to controlled key-generation ceremonies, adding safeguards around how private keys were created and how funds could be restored. On Oct. 9, 2012, 87% of customer funds were held offline. The keys were generated offline, encrypted with AES-256 and stored on USB drives and paper backups in a bank safe-deposit box. About 90% offline storage was a target, not the amount already held. The keys could be physically accessed to restore funds to live servers if withdrawals exceeded 10% of customer deposits in one day.

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