Coinbase Cryptocurrency exchange has added a new feature for its software wallet that will allow Cryptocurrency holders to back up their private keys on iCloud or Google Drive. The new feature is expected to make it easy for the exchange’s clients to access their funds upon misplacing their private keys or losing the device that holds the wallet. However, not everyone has applauded the new move with some claiming it will only expose the users’ funds to more dangers.
Coinbase Wallet Users To Have It Easy With Private Key Storage
Coinbase exchange is among the few Cryptocurrency trading platforms that have gone ahead to develop its own software wallet. The exchange allows the users to be the sole holders of their wallet private keys. The users of this wallet, therefore, feel more secure than those who store their funds in centralized exchanges that are a major target for hackers.
Users To Backup Keys To iCloud or Google Drive
It’s a no-brainer that failure to provide wallet users with an easily accessible way of backing up their private keys has discouraged Cryptocurrency adoption. Coinbase has decided to address this problem by allowing its users to back up their private keys to either iCloud or Google Drive. This will make it easy for them to access their funds in case they lose their wallet for one reason or the other.
The San Francisco-based exchange has said that copies of the private keys will be encrypted before being stored to the cloud and users will have to provide their wallet’s password to access them. On its blog post, the exchange said that it will use AES-256-GCM encryption to encrypt the backup which will be available on the Coinbase Wallet mobile app.
Coinbase has also said that it will not have access to the users’ funds or keys. Furthermore, the exchange confirmed that given that the keys can only be decrypted using a user-set password, cloud service providers will also not have access to the funds or keys. In the post, the exchange encourages the users to also back up their keys manually and use two-factor authentication for extra security.
Convenience To Come At A Security Cost
It’s no secret that secure storage of private keys is always a major challenge. Some of the most commonly used methods today come with their own risks. Writing down the keys and storing them in a secret place comes with its own risks as has been demonstrated with the sudden death of QuadrigaCX Cryptocurrency exchange CEO a few weeks ago. This case demonstrates that a lot needs to done to ensure that the private keys are stored in an easily accessible but also secure way.
Some people have already taken to social media to express their views about the new product. On Twitter, WhalePanda @WhalePanda, a long-time Bitcoin proponent termed the move the dumbest thing that could be developed. It is clear that using this new product will create an extra security vector. However, others feel that such user-friendly function in the Crypto sector will encourage widespread adoption. The new feature will come with some convenience that some will take to be worth the risk.