6M Bitcoin Are Secured By Shared Custody

Almost one-third of the entire Bitcoin supply is secured with a feature that gained adoption after the Mt. Gox heist.

Listen to article Almost six million Bitcoins are stored in multi-signature wallets - nearly one-third of the total supply.

Bitcoin is generally secured with a combination of a public and private key.

In order to transact on the Bitcoin network, a user needs to sign each transaction with their private key.

Let's say the founder of a crypto exchange secures all of the firm's assets with their private key.

Bitcoins could now be secured with multiple signatures, where X out of N signatures would be required to spend it.

The same exchange founder could secure all the deposits with five signatures and require at least three signatures for a transaction.

These five signatures could belong to the various company executives.

They could even delegate one or more of the signatures to a trusted third party.

As most individual holders still do not use this feature, the number of Bitcoins stored in multi-signature wallets could also be used as a good indicator of what proportion of Bitcoin is held by businesses.