That's a cute tent they got in there. Once the technology allows you to be this secure the human factor becomes your weakest link. How many times did we hear of employees who stole from exchanges and mining companies? Even if they don't steal there's always a chance that they'll make a mistake and put whole operation at risk.
Even if they launch their operation into space and generate keys in there I won't trust them. If I lose my money it's on me, but I'd hate to see someone lose it for me.
Topic: [2018-08-29] Wired - Why you need a physical vault to secure a virtual currency (Read 204 times)
August 30, 2018, 02:55:33 PM
August 30, 2018, 06:02:10 AM
The fact is that even though they've done a good job with security, the chances of Coinbase themselves freezing one's account, or being infiltrated internally, is far greater than having any hacker ever penetrate even a moderately protected paper wallet, generated offline by any average Joe.
I guess for these institutional investors, they are stuck with this as one of the only options. But to me, holding the private keys myself is far more secure than having a third party holding it for me, regardless of the level of security they are at.
I guess for these institutional investors, they are stuck with this as one of the only options. But to me, holding the private keys myself is far more secure than having a third party holding it for me, regardless of the level of security they are at.
It's only little people who'd have to worry about being frozen by Coinbase, but I do wonder how much research the big knobs parking money with them have done.
Their cold storage is completely uninsured, it's only the 2% of funds they have online that are insured for hacks at their end, though I really wouldn't want to see that insurance put to the test.
Coinbase in effect are asking people to entrust untold billions to their noodly little techniques that their customers may not understand in the slightest. I'm sure they're the best techniques but it's a pretty unusual state of affairs.
August 30, 2018, 05:42:39 AM
https://www.wired.com/story/coinbase-physical-vault-to-secure-a-virtual-currency/
A very interesting wee insight into how Coinbase do things security wise.
They may be a bunch of willies but they certainly know their stuff when it comes to their own security.
A very interesting wee insight into how Coinbase do things security wise.
They may be a bunch of willies but they certainly know their stuff when it comes to their own security.
From the article:
Quote
Institutional investors are subject to regulations that require them to place customers’ assets with a “qualified custodian.” The Securities and Exchange Commission indicated earlier this year that it is thinking about how to apply this rule to cryptocurrency. Coinbase founder Brian Armstrong wants his firm to be ready. “There’s a bunch of institutional money interested in the cryptocurrency space,” he says. “But they need a qualified institution to act as a custodian.”
This is probably the only reason why anyone would be using Coinbase's vaults to store their BTC at all.
The fact is that even though they've done a good job with security, the chances of Coinbase themselves freezing one's account, or being infiltrated internally, is far greater than having any hacker ever penetrate even a moderately protected paper wallet, generated offline by any average Joe.
I guess for these institutional investors, they are stuck with this as one of the only options. But to me, holding the private keys myself is far more secure than having a third party holding it for me, regardless of the level of security they are at.
August 30, 2018, 04:11:16 AM
I think that nothing less than this security measures would make sense for company which has digital money in its possession, and this amount is measured in tens of billions $. However in my opinion it is not too smart to make such things public, for a simple reason that is impossible to control - and it's about people who are employees of Coinbase, they are actually the weakest link in the whole process. The question is when only one of them can go to the dark side attracted by billions of dollars.
This is something smart, but also additional risk - imagine all that data scattered throughout the world. I'm really interested in where these data are stored safely, luckily Coinbase kept it secret for now.
Quote
Backups are scattered around the world on USB and hard drives in case, as Martin puts it, “a small asteroid hits San Francisco.”
This is something smart, but also additional risk - imagine all that data scattered throughout the world. I'm really interested in where these data are stored safely, luckily Coinbase kept it secret for now.
August 29, 2018, 01:53:23 PM
That's for once a worthy article to read through.
Indeed. For one of the first times in my crypto reading life I feel like I actually learnt something.
I'm really interested to see how a big a deal crypto custody becomes. I get the feeling that most considering it will give up and wind up deferring to the established players. And I wonder how much more paranoid and thorough those players will need to become.
They may wind up responsible for trillions of dollars in value which would certainly keep me up at night.
August 29, 2018, 01:38:15 PM
That's for once a worthy article to read through.
It really makes me feel like a noob with how I have been trying to securely generate and store private keys. If you see how much effort and thought they put into the whole process, it makes you a little bit more comfortable as Coinbase user that they handle the highest possible security standards. According to Coinbase CEO Brian Armstrong they hold around $20 billion in crypto assets, which aside from potentially Binance, makes them the largest single crypto holder ever.
On the other hand, it also makes you a little bit more understanding of why larger parties aren't yet jumping a hole through the roof to take care of their own crypto storage.
It really makes me feel like a noob with how I have been trying to securely generate and store private keys. If you see how much effort and thought they put into the whole process, it makes you a little bit more comfortable as Coinbase user that they handle the highest possible security standards. According to Coinbase CEO Brian Armstrong they hold around $20 billion in crypto assets, which aside from potentially Binance, makes them the largest single crypto holder ever.
On the other hand, it also makes you a little bit more understanding of why larger parties aren't yet jumping a hole through the roof to take care of their own crypto storage.
August 29, 2018, 12:37:31 PM
https://www.wired.com/story/coinbase-physical-vault-to-secure-a-virtual-currency/
A very interesting wee insight into how Coinbase do things security wise.
They may be a bunch of willies but they certainly know their stuff when it comes to their own security.
A very interesting wee insight into how Coinbase do things security wise.
They may be a bunch of willies but they certainly know their stuff when it comes to their own security.
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