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Coinbase, the popular cryptocurrency exchange, has launched a new feature for its standalone digital badet portfolio. The software will offer users the option of backing up their private keys with the help of Google Drive or iCloud.
The idea is to give users of the Coinbase Wallet a safety net in case they lose access to the device on which the software is installed or misplace in one way or another their private keys. However, some members of the cryptocurrency community have pointed out that backing up private keys on cloud storage services could expose users' funds to additional threats.
Storage in the cloud of keys is delivered in Coinbase's "user-controlled" wallet
San Francisco-based Coinbase is one of the few exchanges to launch its own wallet software, helping to promote Trace Mayer's "key evidence" monetary sovereignty, championed on the occasion of the 10th anniversary. the launch of the Bitcoin network. Users of the Coinbase portfolio are the only holders of their private keys. As such, they potentially benefit from a much higher level of security than those who choose to leave money on centralized exchanges, prone to hackers and other security breaches.
The latest feature launched for the Coinbase Wallet is a built-in option to back up the user's private keys to Google Drive or iCloud. This is supposed to provide them with an additional way to access their cryptocurrency funds if they lose access to the wallet for any reason.
According to a Coinbase blog article, copies of private keys stored in the cloud will be encrypted and require the pbadword of the wallet to access the following:
"Your backup is encrypted with AES-256-GCM encryption and accessible only through the Coinbase Wallet mobile app. The backup can only be decrypted using your pbadword. "
The post office adds that Coinbase will not have access to user pbadwords or user funds when using the wallet. They also indicate that the cloud service provider will not have access to it, because the keys can only be decrypted with the pbadword set by the user.
Coinbase indicates that it still encourages users of its wallet software to manually back up their private keys. The message also reminds users that it is important to use two-factor authentication as an extra security measure.
Optimization for convenience always costs a little security
Not everyone is impressed by the latest update of the Coinbase portfolio. Podcaster and longtime Bitcoin supporter @WhalePanda tweeted the following:
the @coinbase Team meeting: "What is the most stupid thing we can find now that we are completely screwed up?" https://t.co/8JaLv8W7j4
– WhalePanda (@WhalePanda) February 12, 2019
In the comments on the Tweet above, other members of the community have expressed concerns about the update. It was called a "hacker dream".
Others understood better the reasons given by Coinbase in their answers but nevertheless called it a dangerous idea in general:
To be fair, it's an encrypted backup. Unfortunately, most people do not worry about securing their pbadwords, and relying on the fact that there is no bug in the implementation of encryption adds one more thing to worry about.
– Random name (@ username0ne) February 12, 2019
Still others have argued that such user-friendly functions on digital money portfolios are necessary so that Bitcoin and others can see the widespread adoption type that number of people in the space hope:
If you want mbad adoption, you have two options. Banks hold bitcoins so that people can spend them with their credit cards or to simplify portfolios as much as possible. Key backups are the most critical part.
– skiddi3 (@ skiddi3_) February 12, 2019
While it is true that Coinbase wallet users opting for the backup of their keys in the cloud create an additional vector of attack against themselves, for the convenience of some will be worth a slight reduction in security . No method of cryptocurrency storage is really impenetrable and different types of users require different levels of security. Some are willing to sacrifice a little (if not a lot) for convenience. As long as they are aware of the extra risks, they should be free to make their own decisions.
Related reading: The new Venture Coinbase allows you to earn free crypto and surges BAT 30%
Featured image of Shutterstock.
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