The Binance Heist: A Compelling Case for Better Wallet Security
On May 8, hackers stole over 7,000 BTC from a hot wallet on the Binance cryptocurrency exchange, worth over $40 million in total. According to Binance, the stolen funds accounted for less than 2% of the exchange’s total bitcoin holdings.
Responding to the news, Michael Novogratz, CEO of the crypto merchant bank Galaxy Digital commented: “2 percent is a lot when your [SIC] the world’s largest crypto exchange. No way to spin this as good.” Tron founder Justin Sun announced on social media that he would personally deposit the dollar equivalent of 7,000 BTC on Binance to support the exchange.
But are personal pledges of support such as these really enough to put an end to Binance’s persistent security breaches? After all, this is already the third in a string of high-profile thefts at the exchange which, in each instance, have triggered sharp drops in the price of bitcoin and Binance Coin and caused market-wide volatility.
Arguing the case for hot-and-cold wallets
The lesson we can draw from the Binance theft is that relying on hot wallets alone to store digital assets is not feasible. Hot wallets are software wallets that are connected to the internet. This makes them susceptible to virus or hacker attack, which can result in private keys and transaction data being compromised. Indeed, no server that runs hot wallets can claim to be 100 percent secure. This isn’t just true for Binance. Even Jaxx, one of the most versatile software wallets on the market, was compromised in June 2017 when a security vulnerability enabled an attacker to empty $400,000 of user funds from wallets.
By comparison, hardware wallets are cut off from the internet and all private keys are stored securely on the wallet, making them by far the safest storage method for cryptocurrencies. Unfortunately, most of the hardware wallets that are currently available have failed to gain traction because they still require a USB connection and the installation of drivers. This cumbersome approach detracts considerably from the user experience.
To solve this problem, Goldlinks has developed its own proprietary wallet solution that adopts a hot-and-cold, dual-wallet design. By integrating both hardware and software wallets, this unique solution enables the secure, user-friendly storage and management of blockchain accounts and assets.
Delivering true security to users
By adopting a decentralized approach, the Goldlinks hardware wallet provides the highest possible level of protection for sensitive data. The wallet boasts three layers of security, including an enterprise-grade Secure Element (SE) chip, a chip operating system (COS), and physical separation of hardware and software wallets. These shield users from hardware tampering, private key and signature attacks, and fraudulent transactions. Moreover, the wallet is also physically robust. The built-in storage can withstand over 100,000 write cycles to minimize the chance of data loss, while an IP67 housing ensures it can operate in harsh environments and at extreme temperatures. The wallet has even passed military-grade security testing.
The Goldlinks mobile app also places user security front and center. Unlike most software wallets that use a 12-word seed phrase, the Goldlinks wallet uses a 24-word seed phrase and 256-bit random number that ensures it can’t be cracked.
In addition to top-notch security, the Goldlinks wallet also delivers a seamless user experience. The hardware wallet connects directly to the mobile app via Bluetooth, eliminating the need to connect to a computer and install USB drivers. This shields the hardware wallet from PC-based threats, while offering instant connectivity, allowing users to trade on the go and never again miss a market opportunity.
It’s also worth noting that the Goldlinks wallet solution comes with built-in support for multiple digital currencies and crypto accounts, allowing users to oversee a broad portfolio and manage all of their accounts from one place. The wallet also supports instant conversion between all major cryptocurrencies and altcoins, making the management of digital assets a breeze.
Closing the loop on the Goldlinks ecosystem
Having a secure, reliable, user-friendly wallet is key to preserving and growing the value of digital assets and undergirding the entire blockchain industry.
Goldlinks is committed to building a secure platform for the management of digital assets that inspires confidence in investors. Moreover, Goldlinks is actively pioneering new business models that will close the loop on a dynamic, sustainable ecosystem. Unlike many traditional wallets, which tend to come and go, the Goldlinks wallet solution advocates a broad choice of apps and usage scenarios that will encourage user retention, ensuring it will be a key pillar of the industry for years to come.