Whether you consider yourself a newcomer to cryptocurrency, an amateur investor, or an expert, it’s always helpful to get a download on the latest perspectives on keeping your crypto assets secure.
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It’s also important to understand that everything in cryptocurrency revolves around keys. When it comes to transacting with cryptocurrency, everyone needs a public key. Public keys are essentially what connect you and your cryptocurrency to the blockchain ledger. Alternatively, private keys are known only to you, and are the tool that you must use to verify or sign transactions involving your cryptocurrency.
Paul Puey is the CEO and founder of Edge, a multi-currency crypto wallet. He elaborates on the nature of blockchain security and the need for these keys, “One of the biggest misconceptions about blockchain technology is the belief that it helps make data secure. In actuality, data on a blockchain is inherently public and visible to everyone. However, the keys used to access a blockchain need to be very secure, as those keys are now money. Therefore, blockchains have not created a new form of security, they have motivated its creation.”
This “cryptographic achievement” as Erik Schmidt, Executive Chairman for Google once called Bitcoin and its underlying technology, helps keep your assets secure, allowing you to use them freely without fear of getting hacked or losing your funds. Another critical thing to keep in mind is that all of these keys are usually lengthy strings of numbers, so it’s essential to have a secure place to keep them, so they don’t get stolen, and so you don’t forget them.
People rely on various types of wallets to store and secure their cryptocurrency. There are a number of options for this, including hardware, paper, desktop, online, and mobile. No matter which option you chose it’s important to make sure it has some key traits to keep your assets secure. Puey shared some of the top features to consider when evaluating cryptocurrency storage options:
First and foremost you have to assess the safety of the storage option you’re considering. In most cases, decentralized options are going to be your best bet. Puey explains, “The problem with centralized security is that it takes everyone’s data and puts it in one place. This puts a massive bullseye on that central location for hackers and attackers to target. It’s a lot like a city or a castle. You might have really thick walls, but you’re still at the top of a hill waving a flag, and all it takes is one person, breaking one brick, to start a chain reaction that allows them to get in. It’s the same with centralized security.”
Wallet options that encrypt data on the user’s side are more secure than those that hold assets in a centralized location. Puey continues, “When it comes to Bitcoin and other cryptocurrencies, we’ve seen this create a huge loss of assets. Any time a wallet is hacked, those funds are lost for good, and there is no crypto version of the FDIC to restore them. So, it’s vital that funds are always secure.” The Mt Gox hack in 2014 is a prime example of how costly security errors can be.
With the diversity of currencies available on the market these days it’s essential to work with wallets that will allow you to quickly exchange your currency in case you have a desire to invest in one that is up and coming, or sell when prices start to get volatile. Puey shares, “We found that our users all around the world were clamoring for a private, secure, open-source, and easy to use multi-asset wallet they could depend on.”
That demand is driven not only by an increase in the volume of cryptocurrencies, but also the increased number of applications in which cryptocurrencies can be used. With the rapid growth of the dApp industry, has come an increased need for flexible, multi-currency storage.
Finally, any storage option you use must meet your needs and feel convenient. Otherwise, you aren’t likely to manage it as frequently as you should. A cryptocurrency wallet is just like your regular wallet: it holds your money and (if you are active in the cryptocurrency space) you will be using it frequently. If you will be using something so often, it’s reasonable to demand that it provide a certain amount of convenience.
Any good wallet should have simple, secure options for authenticating your identity. Puey explains how his company worked toward this goal, “We worked to provide an integration of three core offerings: a hyper-secure and private personal vault, a friendly user interface for blockchain networks and services, and an encrypted single sign-on solution for decentralized applications.” Any wallet you use should have these functions to make it easy for you to use on a regular basis.
When it comes to securing your cryptocurrency, be sure to work with reputable companies, ones that have been recognized as trustworthy by both media experts, and industry influencers. Be sure to vet every option and verify that the company is transparent about their technology, and participating in the community at large.
Privacy Laws Are Only as Effective as the Companies Implementing Them
Privacy is a hot topic for legislators all over the world.
Democractic presidential candidates have privacy laws and regulations in their campaign platforms. Amy Klobuchar discussed a tax on companies who share user data. Elizabeth Warren has introduced legislation that considers the idea of jail time for CEOs over privacy failures. Before he dropped out of the race, John Delaney proposed the U.S. adopt a law similar to the California Consumer Privacy Act, which gives greater agency to consumers when it comes to limiting companies collecting of their data.
Voters are demanding action. A recent poll from Morning Consult found that 79 percent of registered voters said Congress should pursue a bill to better protect the online data of consumers, while 65 percent called data privacy one of the biggest issues facing society.
The European Union, 27 member states with the loss of the UK, enacted the General Data Protection Regulation (GDPR), enshrining the idea that people have control over personal data. California recently enacted its own privacy law, the California Consumer Privacy Act (CCPA), which goes into effect January 1. The law empowers California consumers to know when private companies collect, share or sell their data and to stop that sale if necessary. It applies to companies with annual gross revenue of more than $25 million or that possess information on 50,000 or more consumers.
But laws can have unintended consequences. Sometimes the very laws meant to enforce privacy can result in companies nevertheless sharing it. GDPR opens up a way of crooks to impersonate people and get their data from companies.
A year after GDPR went into effect, researchers in the EU showed how it’s easy to access personal data from companies.
“This isn’t a problem with the law itself, but instead with the companies and organizations implementing it,” Mariano Di Martino, one of the researchers, who is a PhD student as Hasselt University in Belgium, told CoinDesk in an interview. “This may be because of budgetary constraints or maybe it’s because they don’t understand the risks of this data.”
One group used publicly available information, such as names, emails, and phone numbers, in addition to more complicated methods to request information on their research partners from 55 companies under GDPR. One of these complex methods for obtaining the data included replacing the name, birth date and photo on the image of an ID to reflect the person whose information the researchers wanted. Of those 55 companies, 15 companies gave up sensitive personal information to the researchers. Four companies never responded to their data requests, in clear violation of GDPR.
The information they gathered included financial companies giving up details such as ID card numbers, a list of timestamped financial transactions, customer IDs, telephone numbers and place of birth, and transportation and logistic companies releasing locations people visited in the past as well as routes they’d saved.
Another team of researchers in the EU found similar issues when one requested information on his research partner and the research partner’s wife using a spoofed email account that was a variation on the name of the wife. About a quarter of the 150 companies and organizations they contacted gave up sensitive personal information without verifying the identity of the requester. The information given to him included everything from her social security number to her high school grades and various account passwords.
As the CCPA goes into effect, it’s possible we may see similar issues. The GDPR research illustrates that privacy laws may only be as good as the companies affected by them. Which is scary. These leaks have real world implications.
“Say I was trying to stalk someone, and I want to learn more about them,” says Di Martino. “I might send a data request to a company that provides taxi or bus services and try to get all the routes or GPS locations where this person has been. And it could work.”
DROPBIT WALLET CEO CHARGED WITH MONEY-LAUNDERING
- Dropbit CEO Larry Harmon Faces 30 Years in Prison
- Harmon Facilitated Coin Mixing for Darknet Sites
Privacy of crypto transactions has been challenged again, as the CEO of the Dropbit app Larry Harmon has been arrested and charged with conspiracy to launder money.
DROPBIT CEO LARRY HARMON FACES 30 YEARS IN PRISON
Dropbit, the Bitcoin wallet and service, continues to operate for now. But Coin Ninja, Harmon’s cryptocurrency media, had its assets seized. The most contentious issue was the Helix service, which could help Dropbit clients mix their coins.
Peter McCormack, prominent Bitcoin supporter, has noted in a lengthy Twitter thread that Harmon faces serious consequences from attempting to offer private BTC transfers. Reportedly, the usage of Dropbit and Helix have also been related to dark markets.
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However, coin mixing is facing high levels of intolerance, as law enforcement goes after mixer providers. This time, it was US authorities that took notice, making the case directly against Harmon for attempting money-laundering through BTC.
HARMON FACILITATED COIN MIXING FOR DARKNET SITES
The other serious accusation against Harmon is the creation of the Gram search engine, which aggregated results from darknet websites. The Helix coin-mixing service was also affiliated with the Gram search engine, attempting to anonymize BTC usage.
In the indictment papers, there is evidence of actively advertising Helix as a tool to mix BTC and exchange them for new coins that were not tainted by darknet usage. The messages and advertisements helped law enforcement make the case against Harmon. Helix has also reportedly offered mixing services to the Alpha Bay darknet site back in 2016.
Mixers have been used for years in the crypto space, with crackdowns only happening in the past couple of years. With stricter money-laundering rules, even blockchain records are not exempt from scrutiny. Most anonymous uses have been discouraged, and exchanges or merchants already require de-anonymization through KYC.
As a result of the Helix activity, Harmon reportedly helped launder 354,468 BTC, equivalent to above 354 million at current prices. But what is even more curious, the BTC that went through Helix were treated as “money”, in a case where Harmon transferred value without owning a money transmitting business license in the District of Columbia.
Jill Carlson, Meltem Demirors Back $3.3M Round for Non-Custodial Settlement Protocol Arwen
Arwen, a non-custodial settlement protocol developer, has raised $3.3 million in a funding round including Meltem Demirors at CoinShares and Jill Carlson at Slow Ventures.
According to Arwen CEO and co-founder Sharon Goldberg, Slow Ventures led the round, which also included Collaborative Fund, Underscore VC and DG Lab Fund.
The funding will help the Boston-based startup expand its non-custodial settlement system, a layer-2 protocol that secures “assets in motion” via atomic swaps, Goldberg said. In simpler terms, Arwen allows users to settle trades via an exchange’s hot wallet without actually handing over custody of the underlying asset.
The protocol currently supports bitcoin, litecoin and ethereum trades on the KuCoin exchange, though Goldberg said her company is in talks with “institutional partners” interested in using the service. Demirors said an announcement is expected in Q2 2020.
Arwen’s non-custodial solution plays to high-dollar investors, according to Demirors – the type of trader that wants quick access to liquidity, but wants to avoid the risks associated with hot (online) wallets. She pointed out that hackers have proven time and again through 2019 that centralized honeypots are vulnerable, valuable targets to strike.
However, “this settlement technology can be used more broadly than just with centralized exchanges,” Goldberg said. In the long-term, she sees Arwen providing settlement services to a wider market.
Jill Carlson, who led the funding round with her firm Slow Ventures, is also bullish on the technology’s long-tail potential to impact markets beyond crypto.
“This problem of efficient clearing and settlement without more risk, it’s not crypto specific,” she said, adding that traditional capital markets rely on a sluggish settlement process that could also stand to benefit.
Carlson also identified another aspect of Arwen funding round, one she said came more by circumstance than design: the deal’s major players are all women.
“I think it’s really cool to see more and more female entrepreneurs in crypto,” she said.