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How much money do you feel comfortable carrying in your pocket? Most people probably feel safe with a modest sum, but maybe not hundreds of dollars – if someone abused you or if you lost your wallet, everything is gone and probably for good. The idea of carrying thousands of dollars or, damn, the value of an entire savings account in a tote bag or a back pocket looks even wilder; it's too risky.
And yet, that's pretty much what will make users of a couple of smartphones "blockchain-powered" (Pusha T voice: YEUCH! ). While these phones – the Sirin Labs' Finney and HTC Exodus, still in the works and aiming for a late-year release – claim to offer more security for digital parts than any other mobile device on the market. market, they can also the responsibility of the users to be responsible for a fault.
What's a blockchain phone?
The details are relatively rare on the Finney and the Exodus, but on the basis of what Sirin Labs and HTC have released up to here, they seem to incorporate blockchain technology in different ways.
Exode can serve as a transaction confirmation light node for an undisclosed block chain, which should theoretically further decentralize this network. A spokesman for HTC declined to clarify which Blockchain (s) of the cryptocurrency the Exodus may act as a light node, but a website advertising the phone mentions Bitcoin and Ethereum. The Finney will allow users to share computing resources on a large cryptocurrency-based IOTA-based distributed book, which uses a controversial architecture of Directed Acyclic Graphs (DAGs) different from a chain of blocks. A spokesman for Sirin Labs declined to comment on critics of IOTA architecture
These bells and whistles are fine, but both phones have the ability to store private keys – some Random strings, the owner of who controls certain digital parts badociated with a particular offline registry. This technique is known as "cold storage", and it could involve more problems than on a smartphone.
What is cold storage?
The cardinal rule of cryptocurrency is that you control your money directly through your private keys: if you lose your keys, you lose your money.
There are two types of cryptocurrency portfolios, in terms of security: "hot" portfolios and "cold" storage spaces. Both types of portfolios store cryptographic private keys, but hot wallets are online (and therefore more easily hackable) and cold wallets are kept offline, except for a brief window when funds need to be sent. A hot wallet can be an application, and a cold wallet can take the form of a USB drive or a dedicated hardware device like the Trezor or the Nano Ledger. It is generally understood that the majority of its funds – a virtual savings account, basically – should ideally be kept in a cold store for added security.
Cold storage is not a joke, and people are making great efforts to secure their devices. Some cryptocurrency enthusiasts, taking to heart the philosophy of technology "be your own bank," even turned to guns to protect their material hiding which itself can be stored in a safe . Losing a hardware portfolio – or worse, losing the "starting phrase" that can recover a lost portfolio – can be disastrous. Experts also recommend storing this phrase in a fireproof vault.
Too much responsibility?
Cold storage is a high-security method for storing private keys that control most of its digital backgrounds. You can use cold storage for small purchases and daily use, but it is heavier than using a warm wallet and exposes it more often than necessary to the open internet it's better to think of it as a mini Fort Knox for your virtual wealth rarely touched. Security-conscious cryptocurrency owners often use a hot wallet for their purchases and invest the majority of their funds in cold storage.
But phones are for everyday use. While Exodus and Finney probably make it easier to spend cold storage than if you used a USB stick or hardware wallet, it still requires a few extra steps. For example, the cold storage in the Finney phone is blocked from the rest of the device and the phone's expense cryptocurrency requires the user to turn off a second entire screen that activates that part of the phone.
So, it's awkward, but cold storage still has the benefit of allowing you to feel safer by storing more funds than you would in a hot wallet, right? Not really, because there is now the added risk of losing your cold room if you misplace your phone and your seed phrase, or if they are destroyed or stolen. And so users are left to square one: they only put as much cryptocurrency in their wallet as they are willing to lose, or incur a headache, every day they leave the house. It can be argued that the loss of your phone or your startup sentence is a more realistic daily threat than a hacking. A spokesman for Sirin Labs has confirmed that if a Finney user loses his phone and his boot sentence, he definitely loses access to his keys in cold storage, as that is the norm from the industry.
HTC promises that the Exodus will have some sort of portfolio recovery feature, although it's unclear how this will be implemented. HTC spokesmen refused to go into details.
"We think the cell phone is the right device to secure keys," said a HTC spokesperson in an e-mail. "HTC is a world-clbad smartphone manufacturer, bringing decades of experience to this new ecosystem, and our goal is to provide the best hardware, in the most transparent way possible, to secure private keys, encrypt privacy data and sign transactions. "
At this point, no one yet understands why even a big user of cryptocurrency. would like a smartphone based on blockchain. But hey, at least the Exodus will come with CryptoKitties. By the way, a Ledger Nano S hardware portfolio for cold storage costs around $ 100; The Finney and the Exodus will cost you around $ 1,000.
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