Where Bitcoins Meet High-Security Systems
Are digital assets(Bitcoins) as secure as their encryption? Unfortunately not. The dangers do not only come from hackers. As examples of state-of-the-art crypto custody solutions show, security must be thought of further.
The protection of crypto assets can only be guaranteed if there is a clear awareness of the dangers. Attacks on digital assets such as cryptocurrencies or assets no longer end with the numerous attack vectors of cyberattacks. Still, unfortunately, they already extend to the use of physical violence against their owners. Therefore, it is essential to raise awareness of possible dangers, as shown by current state-of-the-art crypto custody solutions examples.
After Bitcoin, Ether, XRP, Lite coin and Co., the Libra Coin initiated by Facebook received unprecedented media attention, triggered solely by the project’s announcement. And the emotionality and sharpness with which the discussion was conducted show how seriously the issue is taken internationally at the state level. And for every investor, the primary concern is protecting their wealth.
The Right Feeling For Danger
In the future, protecting our wealth will not just mean keeping our wallets in the deepest pocket of our jacket or purse or turning the key to our apartment in the lock twice. In the future, we will have invested part of the fruits of our labor, our wealth in crypto-assets and cryptocurrencies. This part of our wealth needs to be kept safe, and we need to understand precisely where and how. This requires that we understand the risks. Therefore, the feeling for dangers must adapt just as much as the temptations of the new possibilities. It is of paramount importance to understand the actual dangers and take appropriate protective measures to do this.
Crypto Custody: Do Hot And Cold Wallets Offer Sufficient Security?
The famous military scientist Carl von Clausewitz argued in the early 19th century: “An army on the defensive, without fortresses, has a hundred vulnerable points, it is a body without armor”. “We must always retain sufficient forces beyond the garrisons to face the enemy in the open field unless we can count on the arrival of an ally to relieve our strongholds and free our army.” With cryptocurrencies, the wallet is the fortress and the blockchain – i.e. the distributed ledger – the army in the open field. It is the task of modern crypto custodians – as guardians of their customers’ assets – to ask themselves every day what additional measures can be taken to protect cryptocurrencies and crypto-assets as best as possible.
Crypto Custody Meets High-Security Facilities
The HSM (hardware security module, a device that generates, stores and protects cryptographic keys) is housed in a military-grade briefcase inside the high-security vault. Employees have limited access to the information they handle to avoid internal theft and work from a secure facility where there is no risk of physical attack, copying or theft of systems or passwords. If an unauthorized attempt is made to access the HSM, its content will be permanently deleted. A recovery plan is activated immediately,
The module is connected to an MPC (Multi-party Computation) system, which offers a fast signature process in a state-of-the-art computer network and generates transactions on the blockchain without a direct internet connection. This minimizes the possibility of fraudulent access and eliminates any potential vector for cyber attacks. These system features are patented and represent an extremely differentiated offering on the market.
Plea For Openness: Danger Identified – Danger Averted
The analysis shows that the security perspective has changed little from Clausewitz to the latest cybersecurity and crypto custody developments. The more you rely on a single system or stronghold, the more vulnerable you are. It’s about layered security, making it time-consuming and costly for attackers to get what they desperately want.
We are still only beginning a new era for our monetary systems. An era is driven by technology in which it is becoming increasingly important for every actor to develop a good understanding of it to build sustainability. Technology has never been right or wrong because only the way we humans use it can make it so. New technologies offer the opportunity to make our world more prosperous for everyone – let’s use this!