The Past, Present and Future Of Securing Data
Do you remember how we used to keep important things safe? Our moms and dads would simply put them in a drawer, lock it and keep the key safe (probably in another drawer). Then the internet arrived and most communication started to take place through emails and IMs, which we couldn’t just store in a drawer locked with a key so we needed another way to keep important things safe. That’s how the password became the most popular way of protecting our data. But just how we moved on from a drawer key, maybe it’s time we evolve the password and the way we take care of our privacy.
The Old Way Of Protecting Sensitive Information
A password was the first, last and only line of defence and we did our best to make it as complicated as possible, to avoid hacks. But making it complicated often meant we would forget it… and to avoid that, we turned to paper once again, by writing down our strong password. That paper would then go in a drawer, which we would often lock with a key. So, actually nothing has changed — our data would still be on paper, protected by a physical key.
As technology evolved, cloud storage became a thing, external hard drives became more popular and of course the USB stick was in everyone’s pocket. Our data made its way to these devices but if we wanted extra security, we would password-protect them. Data could be encrypted but you still needed a password to get past that encryption. Seems we can never get rid of The Password.
Part of the problem was that all our online data was centralized. Cloud storage meant simply that you trusted a company with your data and if that company got hacked, it would all be stolen. And that goes for paid subscriptions as well: think about the huge Sony (PlayStation) hack that resulted in hundreds of thousands of people having their personal information stolen. Whenever you enter your name and credit card information on a site or app, it all gets stored on that company’s database, which is stored on hard drives. Centralized. Hackable.
Here is where blockchain comes in to make a difference. In short, blockchain is a digital ledger used by cryptocurrencies to record transactions publicly and chronologically. This ledger maintains a record of all transactions ever made and it doesn’t have a unique physical location. You cannot point to the blockchain and say “There it is” just how you cannot point to the Internet; they are both formed of a myriad of servers, computers and databases. The ledger information is stored on a peer to peer network so if a hack attack would compromise one computer, the network itself wouldn’t be affected.
Security Issues And How To Overcome Them
It is estimated that crypto currency use will reach mass adoption in 10 years from now. I cannot vouch for the accuracy of that estimate but it is clear that we are the early adopters of cryptocurrency and currently we don’t have a 100% foolproof way of storing and protecting our crypto assets. We are still bound to use passwords, hard drives, single-point-access databases, USB sticks and even paper. In a word — Centralized. And centralized means hackable. Just look at all the big crypto exchanges getting hacked these days: Binance recently reported service disruption due to irregular trading activity on some accounts (that’s fancy talk for “We’ve been hacked”). Prior to that Bitfinex reported something similar but it’s not clear if money was stolen or how much.
For numbers that are more accurate we have to look just a month back to the Coinrail hack, which happened in June 2018 and resulted in about 40 Million USD worth of crypto being stolen. And more recently (July 9, 2018), Bancor exchange was hacked for approximately 23.5 Million USD worth of crypto currency.
All this points to a clear conclusion: don’t keep your crypto assets in exchanges! If you are day trading, then keep in your exchange account just what you need for trading, not more. If you are simply HODL-ing, then never store your investments on an exchange. Keep it in a crypto wallet because it’s been proven many times it’s safer than an exchange.
While a crypto wallet benefits from higher security, there are still issues. Mainly, if you lose access to the wallet, you can only restore it with a private key (or by case a mnemonic phrase, password, recovery seed, etc. — we will call it a private key as a general term). Say you lose your wallet password — there’s no way of recovering it because it is not stored on any server. This is both a good and bad thing: higher security because it cannot be stolen but risky because if you lose it you cannot access your crypto assets anymore. Another issue is physically losing your hardware crypto wallet. It happened to many people, so it’s not so farfetched to lose a USB stick or a Ledger/Trezor wallet.
If any of the above happens, you need your private key to restore the wallet, i.e. buy a new Ledger and restore all the contents of the old one you lost. This means that your private key is more important than your password, so you definitely need to keep it safe. Now what can you do about that? Maybe write it down and store it in a drawer? Or store it on an USB stick? All this does is create a vicious circle that gets us back where we started: to a password or a private key stored behind a password, which is then backed up behind another password. And it’s all centralized, in a single location. Can this be averted?
Of course, but only if we start using decentralized solutions for our security and privacy problems. This is where solutions like Infinitus (INF) come into play and make a difference by storing your private key and password on the blockchain, on a peer to peer network. This way, the risks of hacks as well as data loss are eliminated. And finally, the password conundrum is also eliminated because the INF dApp is built on a smart contract that automatically sends the private key to your designated receiver upon a predetermined event, which can be a period of inactivity. So, if you lose your phone or password to the INF dApp, it means you will become inactive and eventually the smart contract will trigger, sending the private data back to you
New Times, New Technologies
Blockchain technology is making its way into everyday life and smart contracts are being used for much more than just crypto coins. The Infinitus (INF) example above is undeniable proof that distributed ledger technology can be used to solve a real life problem even for people who are not crypto enthusiasts: if you don’t want to worry about passwords being lost ever again, simply store them on the blockchain through INF. It’s a new age of technology, where nothing can be lost and centralization will soon be obsolete.
