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Beyond hardware and software wallets: Where’s the safest place to store your cryptocurrency?

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Beyond hardware and software wallets: Where’s the safest place to store your cryptocurrency?
Source: Pixabay

We investigate the existing ways of banking your cryptocurrency and try to find out if newer second-generation solutions, or new technologies, deserve your trust.

Reportedly over $1 billion worth of currency was taken directly out of the digital pockets of users, exchanges and businesses by hackers and other malicious attackers worldwide between 2017 and 2018.

The importance of security to blockchain is arguably reflected in both the severity and regularity of cryptocurrency related thefts. Theft poses a threat to blockchain companies of all types, as well as to token-holders.

Exchanges use software wallets

Significant examples are attacks against cryptocurrency exchanges: making victims of both the business and its customers.

It is unknown which individual citizen has lost the greatest volume of cryptocurrency at this point [and it’s not something many would admit to], but in the worst recorded cases of attacks, victims have lost millions of dollars worth of tokens.

In some cases where this happens, the exchange [if financially, commercially and ethically grounded] refunds all customers affected for their losses. Others, however, are not so fortunate.

Exchanges are continually targeted by hackers for a myriad of reasons, but generally speaking, it can be summed up by the following conclusion: all funds and wallets are held in a networked resource, and provide an “always online” token-storage solution for customers.

If the network is compromised, then all user data and currency is made vulnerable as well. This has led to the creation of solutions which seek to overcome these security flaws, such as the first generation of “hardware wallets”.

When Wallets went hardware

The fundamental difference between hardware and software wallets is indicated by their names.

With software wallets [like accounts on crypto exchanges]: user funds, identity, and private keys are stored and managed by the service provider in an online server. Hardware wallets, on the other hand, attempt to protect funds and other data by storing them fully offline.

A typical hardware wallet keeps private keys in memory on a device and signs transactions outside of the computer environment so that the keys cannot be exposed to an online attack.

Whilst the key is secure for the most part due to being stored on an offline device, this does not make these wallets completely oblivious to security threats. After all, the key is still secured on this device which-if compromised-would allow the attacker full access to the victim’s account.

The hardware wallets today are far different from their forebears. Many of these progenitors have released subsequent products along with a new generation of competitors, with new features and technologies that go beyond cold storage methods.

Hardware wallets have been praised by many as one of the most reliable ways to keep your cryptocurrency safe, however, this does not guarantee 100% safety. Cold storage devices protect users from online attacks [since the private keys are never online], but they do not offer protection from physical attacks such as when the device is seized, lost, or stolen.

Hardware 2.0

Threats to security don’t always come from external sources, with reports of user errors costing individuals dearly.

Hardware wallet manufacturer Bitfi claims to have eradicated problems surrounding storage and subsequent theft of private keys by creating a device in which the private key is created anytime a user performs a transaction. No private keys exist on the device once a transaction is complete.

Because no vulnerable data is stored on board in the device, it means that even if a hacker were to successfully intrude, they would not have access to any usable data.

This could prove to be an elegant solution to an ongoing security challenge. Rather than building ever more sophisticated encryption to store private keys, Bitfi doesn’t store them at all. This eliminates the possibility that they can be stolen.

According to BitFi representatives, the reason for this is:

“something that is stored can be stolen either through an online or physical offline attack. On the other hand, something that is not there at all cannot be stolen.”

A blank slate

The latest product from Bitfi is called the DMA-2 and it’s the company’s second-generation entry into the market, and the project receives continual updates online. Whilst a progression in firmware and an upgrade in hardware, DMA2 still possesses all of the key features that make BitFi’s technology different from other wallets on the market.

Instead of using a mnemonic seed as the means of recovering an otherwise inaccessible account, BitFi replaces this long [up to 24 words] access code with a much shorter ‘secret phrase’. One that is easier to remember than its counterpart, and thus offering the possibility to be memorized.

The secret phrase feature is amongst a number of key features incorporated into BitFi’s technology that is focused towards providing the best security solution for cryptocurrency storage, that anybody can use with relative ease.

Along with an accessible and UX optimized interface, BitFi doesn’t require the user to install any additional applications or software on their computer: reducing the number of steps between becoming a customer and being a secured token-holder.

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Bibox Exchange: Four projects to be launched in first phase of Bibox Orbit!

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Bibox Exchange: Four Projects will be Launched on the First Phase of Bibox Orbit!
Source: BiBox

The cryptocurrency ecosystem is exceptionally volatile and the market is highly speculative with regards to price hikes and predictions. The winter of 2018 witnessed a period of extreme bearish outbreak when the total market capitalization of the global virtual currencies fell to $112.1 billion. In comparison, the market was worth $760 billion in early 2018.

Considering this, the importance of cryptocurrency exchanges has been widely recognized and is one of the fundamental aspects of the global assets industry.

Bibox, a crypto-exchange registered in Estonia is one of the largest crypto-exchanges in the world. Bibox exchange is well-known for its user-friendly interface and stands out amongst its competition for its extreme reliability and efficient functionality.

The exchange recently made a major announcement and stated that the crypto-platform would be launching its Initial Exchange Offering [IEO] platform, known as “Bibox Orbit” at 10 am on April 22nd,2019 [GMT+8]. According to the official statement, the key objective of the exchange is to promote and launch the development of high-quality decentralized projects on its platform.

Bibox Orbit:

Bibox Orbit is basically a token launch platform which was created with the sole intention of developing quality decentralized projects. As a leading global assets trading platform, Bibox Orbit will be completely focused on boosting premium decentralized projects so that they are able to raise capital and remain sustainable for long-term development.

Introducing the First Phase of Bibox Orbit and 4-Quality Projects:

Bibox announced that the first phase of Bibox Orbit would be officially launched on 22nd April 2019 [GMT+8] and they also mentioned the inclusion of four quality projects for the users to purchase into development after its launch.

The projects are mentioned below:

The Force Protocol [FOR]

The Force Protocol is an open-source blockchain platform that provides crypto-financial solutions to developers with an aim to improve the virtual assets market. It is based on the mainstream public chain system and the under-layer standard data network of protocols. The project would offer solutions for financial needs such as cross-platform assets transactions, shared trading volumes, cross-chain communications, multiple blockchain crypto-assets collaterals backed stable coin issuing, token bonds issuing, on-chain payment, settlement, and clearing of transactions, among others.

Ludos [LUD]

Ludos, a Singapore-based distributed gaming ecosystem solution, aims to turn blockchain games into reality and release a decentralized gaming sphere and incentivize the platform. Gamers would be able to manage and trade their gaming assets on one hand, while on the other hand, they would also be able to manage game crowdfunding. The core team members of the project are from Columbia University, Carnegie Mellon University, Peking University and other institutions of higher learning.

Staking [SKR]

Staking is a decentralized asset management entity which aims to create a transparent decentralized management platform that is efficient, secure and allows investors to safely stake their capital. The platform provides an ecosystem of a Proof-of-Stake [PoS] mining pool and a detailed infrastructure for the Decentralized Finance [DeFi] market.

Additionally, the platform owns one of the most secure databases in the world as system infrastructure. The core team is composed of experts from Tsinghua University, Columbia University, University of Toronto, and other world-renowned universities.

X-Block [IX]

X-Block, a computing framework is the world’s first blockchain based entity for fog computing. In comparison to other traditional cloud computing platforms, users would be able to access more services at a minimal cost with the X-Block Fog computing services.

The members of X-Block cover digital asset investment, network security operation and maintenance, distributed computing, financial consulting, fund management and many other fields. X-block was promoted by DFG, a well-known Silicon Valley investment institution, and had received a strategic investment from Kosmos Capital, a top Australian investor institution.

Why is Bibox Orbit Launching Four Projects together?

Aries Wang, the Co-Founder of Bibox Exchange, explained the motivation behind launching four projects at the same time. According to Aries:

“People are curious why we have chosen to launch four projects simultaneously. Firstly, It’s not a simple decision, these four projects were picked out from hundreds of applicants. They are diversified but outstanding. Apart from their understandable token economy and innovation in blockchain technology, our listing team is also impressed by their professional experience in varied industries and their backed capitals.” 

He also mentioned that the launch of four qualified projects together would increase the user’s opportunity to win the lottery, also it would give investors multiple alternatives to choose their preferred area. The launch of multiple projects on Bibox Orbit proves the exchange’s mission “Quality & Diversity”.

How to Participate?

After a collective consensus between all the parties involved, it was decided that the first phase of Bibox Orbit would determine the personal pre-purchase amount of BIX holders via a random draw. This implied that participants involved would experience maximum fairness and equity and it would allow more users to participate in the projects they like.

  1. Pre-Purchase Start Time

The first phase of Bibox orbit is going to have four projects available for the participants to purchase at the same time.

The timing of the purchases are:

  • Pre-Purchase Start Time:April 22 10:00 GMT+8
  • Pre-Purchase Stop Time:April22 17:00 GMT+8
  • Drawing Time:April 22 20:00 GMT+8
  1. How to purchase?

On the Bibox exchange, BIX in the only token validated to be used for pre-purchase investment and payment in the projects. There is no minimum limit for the BIX holding amount, but the maximum amount that can be stored should not cross the threshold of the BIX equivalent of $5,000.

Important notes:

1. participants of Bibox Orbit must complete     KYC real-name authentication first.

2. Sub-accounts are not allowed for Bibox Orbit.

3. Users in areas prohibited by law are not allowed to participate in the event.

4. During the pre-purchase period, Bibox shall have the right to disqualify the applicant if it finds any cheating behavior such as false authentication information or repeated KYC.

5. Bib has the right of the final interpretation of the rules.

For more information regarding the launch please visit the website and official link.

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