Paxful, a bitcoin exchange that is one of few in the space that focuses solely on a person-to-person trading platform, is now using BitGo as their exchange hot wallet provider.
Being a bitcoin exchange these days is a tough job. With hacks, extortion, and DDoS attempts being almost a regular thing now, securing your hot wallet funds is a top priority. And it seems Paxful is not taking any risks in their move to switch to BitGo.
BitGo is a wallet, but more than that they are a SaaS company that several bitcoin exchanges use to secure their funds, outsourcing the hard labor and responsibility to BitGo to manage while leaving the exchange with full control over their funds. BitGo’s wallet uses a 2-of-3 multi-signature scheme which removes all single points of failure by using 3 keys: a private key, a offline backup key and BitGo’s co-signing key. Each transaction requires 2 keys for signing giving exchanges full control.
Bitcoin hot wallets are now the target of every hacker in the world and we feel safe with Bitgo securing our Hot Wallet and doing all blockchain transactions for us.
Paxful has recently had a steady rise in customers as their claim to fame was when the classifieds site Backpage was forced to remove credit cards as a form of payment, and Paxful stepped up and was integrated into Backpage for users buy bitcoins in order to pay for ads on the site.