Insurance for Hot Wallets is a BandAid on a Bullet Wound
It’s great that centralized exchanges are finally taking out insurance policies to cover their risky practices. (As reported in CoinTelegraph and CoinDesk.) With new hacks on hot wallets every day, it’s too little too late. Keeping funds in hot wallets is so inherently dangerous that insurance is just a band aid on a bullet wound.
If hot wallets are so dangerous, why keep your money there in the first place? Most people do so that they have access to the funds and can move with the market. Yesterday’s spike in BTC and basically every other token demonstrates why that’s so important.
Keeping money in a hot wallet, though, is a terrible solution for protecting your tokens and keeping them liquid. And that holds true even if the funds are insured. That insurance comes with a hefty premium that exchanges will pass along to users in the form of fees.
A much better model is to decentralize the risk by storing your private keys in a mobile wallet that’s a.) guaranteed and b.) just as secure as a hardware wallet, because it uses special trusted execution environment chips that are already in 1.6 billion phones.
Why aren’t most people already using this option? It’s brand new and rejects the paradigm of hardware wallets versus software wallets. At SignKeys we’re calling this entirely new category the Guaranteed Secure Mobile Wallet.
Here’s what Guaranteed Secure Mobile Wallets fix:
- Decentralized Risk: Individual wallets are not good targets for hackers because the work is too great for the payoff.
- Backed by a Communal Guarantee: Rather than paying a big insurer monthly premiums, a sunk cost, we’ve created a community guarantee pool. Every time someone buys our KEYS tokens (only through our authorized app) we set aside 25% in a reserve pool. We then guarantee other crypto funds in the wallet up to 10 times what people hold in KEYS. There are no fees this way. Zero. You simply need to hold KEYS tokens. (In other words, rather than a sunk cost, you could potentially make money by holding KEYS if they appreciate in value.)
- Military Spec Hardware-based Security: We’re using the same hardware in your phone that Samsung and Apple use to secure payments and that the US military uses to secure sensitive data like launch codes. Unlike hardware wallets, you keep your funds ready to trade, without having to plug a dongle into a computer.
- Incredible Convenience: Not only do your tokens stay liquid — unlike a hardware wallet — sending and receiving them securely is literally as easy as opening your wallet, hitting send, and selecting your favorite messenger app. There’s no need to copy and paste a wallet address, which is extremely prone to errors. We also support over 220 tokens now, with a mission to support them all.
Yeah, this is all great, but it’s just one wallet, not a revolution. Wrong. Our focus at SignKeys is on creating an ecosystem based on our technology and our KEYS token.
We white labeled our wallet and modularized both our security measures and guarantee, so that any company can implement them in their own apps. Coin Stats, the crypto portfolio tracker with more than 500,000 monthly users, rolled out a secure wallet based on our technology just a couple weeks ago. We’re helping to launch a digital ID solution soon as well.
Do you still think you need a risky hot wallet? Not only does SignKeys put you in a bulletproof vest (our security) we’ve also got the best doctors standing by (our transparent guarantee).