Cryptocurrency storage: Bakkt Warehouse and Simba Storage, what’s the difference?

Every person who has at his disposal such an asset as cryptocurrency, sooner or later faces the need to safely store their funds. Investors who have managed to buy Bitcoin at low prices, or those who are just looking at the asset, should be aware that Bitcoin is too high a value to take its storage lightly. Bitcoin is the digital currency of the future, constantly growing in price, due to the limited number and increase in resources necessary for its issuance, which is laid at the software level at its core.

In which country to store Bitcoins?

To begin with, you need to proceed from the country in which the Bitcoin holder operates. For example, if you take Russia, it immediately becomes obvious that eventually you will have to store cryptocurrencies in another country.

First, the already adopted laws, for example, 259-FZ (FZ — Russian for federal law) and those laws, the adoption of which is still under consideration, guarantee that it will not be possible to own Bitcoins in Russia and avoid paying high taxes or withdrawing funds.

The reason is not even that laws and taxes are the enemies of Bitcoin, but that there are no specifics on the procedures that need to be followed to avoid negative consequences. In simple words, citizens who own Bitcoins should pay taxes, but can they do it correctly in accordance with the law, if the one is unknown, since there are no clear procedures. Of course, over time, the situation may improve for the better, but so far there is no motivation to store cryptocurrency assets on the territory of the Russian Federation.

Secondly, it is necessary to take into account the level of crime in the country and the standard of living of its citizens. In a country with a low crime rate and a high standard of living, there are no risks of theft of funds, hacking of cryptocurrency vaults and other attacks by intruders.

In which country can you hear the news about the loss of money from the safe deposit box of one of the leading banks, in Switzerland or in Russia? — the question is dead-ender.

Switzerland, Liechtenstein, the United Arab Emirates, and similar countries with a high standard of living and low crime level will always be the guarantors of safety for assets stored in the country.

If we talk about Bitcoins, then Switzerland’s leadership among all countries is indisputable. It is in this country that the Crypto Valley Association is located, which unites all the giants of the cryptocurrency industry. Moreover, the laws of Switzerland have already spelled out all the nuances for owners of digital assets and for legal entities working with cryptocurrencies. It is important to mention that the country also supports the development of the cryptocurrency industry in every possible way. Crypto Valley Labs, an organization that invests in promising projects, provides strong support to cryptocurrency businesses, allowing you to always stay afloat, be in the trend and have access to advanced technologies.

Therefore, a large number of companies working with the cryptocurrency market, including Simba.Storage, are located here.

Why do we need cryptocurrency storages?

For cryptocurrencies, there are two types of storage, cold and hot.

Cold storage implies the presence of a physical device on which a cryptocurrency is stored. Specialized cold wallets look like regular flash drives, but have a high degree of protection. You can also store digital assets on a computer that does not have an Internet connection, on a hard disk, and so on.

Hot storage means that assets are stored on online platforms or desktop wallets that require an internet connection. People store funds in the accounts of exchanges, in the applications of cryptocurrency wallets, and so on. It makes no sense to go into the details of the pros and cons of hot storage, just understand that there is a possibility of theft of funds by hackers, account hacking and other actions by intruders. This option is not bad only for traders who have accounts on several exchanges and wallets, as they need to constantly have funds at hand so that they can enter into transactions at any time of the day or night.

Therefore, for long-term investment, and it is best suited for such an asset as Bitcoin, you can only consider the option of cold storage.

Despite the high level of security of cold storage, there are also risks of theft of physical media and other malicious actions that can lead to the loss of funds.

That is why cryptocurrency vaults are created, which are able to provide the maximum possible degree of protection of client cryptocurrency assets and provide security guarantees.

Bakkt Warehouse and Simba Storage

Bakkt

In 2019, a Bitcoin storage facility for institutional investors called Bakkt Warehouse was opened. Bakkt Warehouse combines hot and cold storage of digital assets. The storage position is that combining both types of storage allows you to minimize the risks from hot storage.

Most assets are stored offline in cold wallets. One of the main advantages is that the invested assets are insured, although the insurance is more focused on those funds that are stored in hot wallets.

Special attention is paid to the protection of user funds, all important operations within the company are carried out in secure premises, where only authorized employees can access, for which a combination of biometric data, PIN code and swipe card is required for authentication.

We can say that from the point of view of security systems, Bakkt Warehouse is a reliable storage.

Among the disadvantages is that Bakkt is focused on institutional investors, which limits access to storage services. But the greater inconvenience is caused by the location of the storage on the territory of the United States, a country that is skeptical about cryptocurrencies.

The strict regulation of cryptocurrencies forces all industry giants to refrain from serving customers in the country. Although some states may strive for cryptoliberalism, and American regulators do not make concessions, justifying this with the desire to protect American crypto investors, the lack of the most specific and transparent position in relation to digital assets, as in the example with Russia, is alarming the entire cryptocurrency community.

Simba Storage

Simba Storage is a Bitcoin storage service located in Switzerland that is a member of the Crypto Valley Association. Founded in 2020, it offers Bitcoin custody services for all crypto investors.

The presence of storage in the Crypto Valley allows Simba Storage to offer more flexible tools for its customers and transparency of its activities, thanks to the Swiss legislation, which describes the rights and obligations when working with digital assets in the most detailed way. The country encourages the use of cryptocurrencies and work with them. That is why every investor can make plans for the future without fear that at any time a new law may be issued that infringes on their rights and calls into question the legality of owning digital assets.

Simba Storage is mainly used for cold storage, while hot storage is used for prompt withdrawal of funds to users. No more than 10% of Bitcoins are stored on hot wallets, the remaining 90% are in cold storage, unlike Bakkt, they do not need to take into account the risks of hot wallets.

The storage also provides maximum protection of client funds both in the form of round-the-clock protection of cold wallets, a comprehensive employee authentication system, and at the technology level.

An additional tool for working with the storage is the SIMBA stablecoin, an ERC20 token secured by Bitcoin, which is credited to each Simba Storage client in the ratio of 1 SIMBA = 1 satoshi for the funds deposited. This token can be used for any transactions, cross-border transfers, payment for goods and services.

If the Simba Storage client loses access to their account, they can always restore it by going through the KYC procedure.

I think it’s worth adding a point about the low storage usage fees

the prices for the services provided by Simba Storage can be called democratic. Customers are charged 100,000 SIMBA for opening and closing an account.

To sum up, it should be said that long-term investments in Bitcoin will necessarily bring a much higher profit than investing in any other asset. Only a properly selected service for storing purchased Bitcoins can save you from the risks of losing them. When choosing a service, you should first of all be guided by the location of the storage. At the moment, there is no more reliable country for using and storing cryptocurrencies than Switzerland.