Xapo
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www.xapo.com|Bitcoin|2013 logo
Written on: May 25th, 2015 | Author: David Marc
BITREVIEW SCORES(Click the desired topic to view more info)SECURITY5starFEATURES3starMOBILE5starBitReview Rating: Summrized Score
QUICK TAKE"Deep" cold storage is managed by XAPO and third-party insuredHot wallet connects to a XAPO debit card, allowing for easy day-to-day use of coin.Excellent IOS and Android applications allow transferring of bitcoin by email, address or QR code, and debit card fully manageable from within apps.
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Summary
Known as the Fort Knox of Bitcoin, Xapo signature feature is its deep cold storage solution, which was recently made free for all users. However, CEO and founder Wences Casares, a serial entrepreneur and passionate bitcoin advocate, aspires for Xapo to become the Bank of America of digital currency. With its headquarters in Switzerland, $40 million in funding, and a blue ribbon board of directors including Dee Hock, founder of Visa; John Reed, former Chairman and CEO of Citibank; and Lawrence Summers, Secretary of Treasury under President Bill Clinton and former President of Harvard Univesity, perhaps such ambitions don't seem so far fetched.
Security
Famous for its "deep cold storage", Xapo boasts a network of offline servers and paper wallets protected by biometric scanners, radio-wave blocking cages and armed guards. These "vaults" are distributed across multiple geographic locations ensure that, even if a government were to bypass the cryptographic and physical security measures employeed, all other vaults would remain intact. More importantly, the vaults are insured by the Meridian Insurance Group, so even in the unlikely event of a breach, customer funds are protected. Xapo has recently been making waves with a plan to locate specific elements of its security architecture in a low Earth orbit satellite. Lest you immediately think that this smacks of a publicity stunt, Xapo explains that the satellite possesses a piece of data that can never change, absent a physical breach of the satellite. If there is a security breach back on Earth, the way in which the satellite communicates will change, thus instantly raising the alarm bell.
Entrance to the vault requires inputting your password, and you can choose to set up two factor authorization as well, which is recommended. Additional users can be granted access to your vault as well to implement multiple signature functionality. Minor irritant - every additional click forward or backwards through the vault requires an additional password input, which seems redundant and interrupts user flow.
wallet
Transferring money into the vault requires inputting address and ID number, and depending on your location, they might refuse service. US and European customers should be fine. Vault withdrawals are time delayed by 48 hours, during which time a series of authentication measures are undertaken to ensure request integrity. The progress of this authentication procedure can be followed in a users transaction history.
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The Product
Xapo has a beautifully designed website with intuitive navigation and integrated, step by step directions for all the Xapo features offered. Debit card management, vault and hot wallet access, and all accounting features are available on both desktop and excellent iOS and Android mobile solutions.
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The Xapo Debit Card
The online wallet can be likened to a checking account, meant only to hold day-to-day funds. From the wallet, Xapo's debit card service can be used both to withdraw fiat currency or transact with merchants. When a transaction is placed, Xapo checks to ensure there is adequate coin in the wallet, quickly makes the exchange on bitstamp, and the merchant - or cash dispenser - pays out in fiat.
Fee Description Amount
USD EUR GBP
Odering fee Covered by Xapo during beta $15.00 €15.00 £15.00
Monthly service fee Covered by Xapo $4.95 €3.95 £3.95
Withdraw cash ATM domestic $3.50 €2.50 £2.50
ATM international $4.50 €3.50 £3.50
Declined transaction $1.00 €1.00 £1.00
POS Currency conversion 3% 3% 3%
Services Card replacement $5.50 €4.50 £4.50
Removal of unused funds $10.00 €10.00 £10.00
Charges are taken in bitcoin directly from a user's Xapo wallet. While the fees seem high, with greater adoption we assume they will continue to decline.
There was much customer dissatisfaction with high fees that were not properly disclosed by Xapo, but Xapo explained that this was due to miscommunication with the third-party card issuer, and there isn't much reason not to take them at their word. They were honorable in refunding monies to affected customers. Additional technical hiccups don't detract from the potential of this service.
Bitcoin account management
Xapo offers users the ability to create multiple wallet addresses, each with custom administrative permissions. When first setting a wallet, an admin can add users and set permission levels, including their ability to make transfers from the account, designate users as transaction approvers, and set their approval threshold. While this can be useful for a family account - as debit card-linked accounts can be allocated to children, for instance, with designated spending levels - for institutional clients it allows robust accounting and fund allocation between teams or departments, client investment accounts, savings accounts, spending accounts, etc. A partnership with bitwage allows full payroll management directly from Xapo, with employees receiving funds into debit-card enabled accounts instantly.
In a sign that Xapo is looking to become a one-stop bitcoin shop, wire transfers are now accepted to fund Xapo accounts. Aside from client-side bank charges and any applicable conversion fees, Xapo charges a 1% fee, and the bitcoin should appear in customer accounts within 2-5 days.
Mobile
Xapo offers the full functionality available on its desktop client through ios and android applications. Transactions are synced in real time across all user devices. Users can send payments via email, QR code or vault address, and debit card are manageable directly from the app interface.
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Bottom Line
We could be looking at a future titan of the digital currency market. Xapo combines insured, bank-grade savings account security with easy access and usability for spending cash. We would like to see bitcoin's status as cost-free interlocutor between currencies leveraged for lower debit card fees. Keep an eye on Xapo's actions in Mr. Casares' home country of Argentina, where Xapo has disruptive potential.
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