How Many Bitcoin Does Coinbase Hold? – Chain.Info
Although not everyone is familiar with its name, if you are in the cryptocurrency space, you have probably heard of the US exchange, Coinbase. The darling of the crypto markets, Coinbase, which opened in 2012, has served more than 30 million users, and it has had exchanged more than 150 billion US dollars worth of cryptocurrency over the years.
Because a large part of its customers are from the United States, Coinbase places great importance on regulatory compliance. In 2017, Coinbase obtained the BitLicense issued by the New York Department of Financial Services, which it was only the second exchange to obtain this license at the time. The requirements for the special digital currency business license issued by the regulator, in the center of the financial world, are very demanding. So far, roughly than 20 companies have been approved for a license.
Obtaining this license indicates that the business’ transaction data and system security have been recognized as satisfactory by the licensing agency and will undergo regular inspections. These inspections help ensure the validity of exchange data and the security of their systems. According to CoinMarketCap’s data, more than 40% of the transaction volume on Coinbase comes from BTC-related trading pairs.
BTC transactions can be considered one of Coinbase’s most important businesses, so Coinbase also attaches great importance to the security of their Bitcoin accounts. At a deeper look, Coinbase’s system is very different from other exchanges. Unlike the relatively fixed wallet clusters of most exchanges, Coinbase uses a large number of disposable wallets as deposit wallets and hot wallets, and its cold storage wallet addresses are also very scattered, so it is difficult to perform data mining.
Most current data service agencies are unable to provide Coinbase-related account identification and fund flow tracking. A few institutions that can provide Coinbase account-related data,such as WhaleAlert, have not given detailed wallet balance and transfer data, only sporadic early warnings of large transfers. Chain.info this time, through artificial intelligence-assisted data mining, effectively-identify Coinbase’s BTC account system, filling a big gap in the market.
Since it is difficult to track and trace exchange wallets, accurate data is so rare? Let us briefly understand the exchange wallet system. Exchange wallets are generally divided into three types: deposit wallets, hot wallets, and cold wallets.
Deposit wallet
As the name implies, a deposit wallet. It is mainly used for users’ deposits, similar to the user’s bank address. Exchanges usually provide users with this type of wallet address when they register. But unlike bank accounts, users only use this address when depositing money, and most withdrawals are withdrawn from the hot wallet of the exchange. The number of depositing wallets is large, and 99% of the accounts controlled by the exchange belong to this category.
Hot wallet
The hot wallet is also the online wallet of the exchange. Its main function is to serve as a channel for the circulation of funds between ordinary deposit addresses and cold wallets, and for users to withdraw coins. The proportion of hot wallets is extremely small. The number of hot wallets on most exchanges is between 10 and 30, but transactions of such wallets are extremely frequent.
Cold wallet
A cold wallet is another name for an offline wallet. Exchanges use cold wallets daily to move coins that don’t need to be accessed immediately or after a certain amount of funds are accumulated in the hot wallet. In this process, the cold wallet will interact with the hot wallet, and there will be no direct interaction with the ordinary deposit address. The exchange will physically isolate the cold wallet’s private key (disconnected from the internet), so that the possibility of hacking is minimized when the cold wallet is offline.
The above is the wallet structure of most exchanges, and each part of Coinbase’s account system is different. The overall structure of Coinbase’s deposit wallet is similar to most exchanges, but its deposit wallet address can be replaced, and users can load coins using a one-time address. This design improves the security of the wallet but also brings a lot of additional difficulties in data mining. In contrast to ordinary hot exchanges with only 10–30 hot wallets, Coinbase uses a hot wallet library containing a massive amount of addresses. Most of these hot wallets will only be used once (only two transactions one transferred in and one out). This has led to a huge increase in the number of hot wallets and there is not much history to trace back. In addition, a large majority of exchanges only have a few wallets with more than 20,000 BTC as a cold wallet, and Coinbase constructs a cold wallet library address consisting of smaller amounts (8,000 ~ 10,000 BTC).
Coinbase uses a large number of one-time addresses and scattered storage of many small addresses to improve security, while also increasing the difficulty of identification and mining. In order to tap Coinbase’s wallet system, Chain.info uses conventional data mining methods outside the data obtained on the wallet chain address. Features are used as samples to train a machine-learning model, and then use the model to automatically identify and cluster the top 10,000 addresses on the Bitcoin Rich List.
Chain.info has found nearly 300 cold wallets belonging to Coinbase through advanced algorithms, most of which are less than 10,000 BTC. From the perspective of the total bitcoin balance on the chain, the total BTC balance in the Coinbase wallet system is nearly 1 million, which is about 8.4 billion US dollars at the current price (the latest price of BTC before publication is $ 8677.67), which is far higher than the 310,000 and 250,000 btc of Huobi and Binance, Coinbase is currently the number one exchange in terms of bitcoin held.
At present, most on-chain data service providers are unable to provide Coinbase data, which also shows that the design of Coinbase has realized its effect in improving wallet security and privacy. Chain.info is the only platform on the market that provides Coinbase’s relatively complete wallet data. At present, the data has been updated to the official website exchange list (https://chain.info/exchanges) and the rich list (https: // chain. info / richlist), Coinbase wallet balance changes, inflows and outflows, and large transfers are also listed on Chain.info’s official website and API services. Welcome to check. I believe that after adding this piece of the puzzle, the transparency of bitcoin circulation will rise to a new level, and friends who are interested in data on the blockchain and wallet address mining are welcome to follow Chain.info.
Published at Wed, 11 Dec 2019 02:28:09 +0000
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