Coinbase, the most popular US-based cryptocurrency exchange, has announced encrypted storage support for their Coinbase Wallet private keys on Google Drive and iCloud.
The popular crypto wallet will allow users who opt in to this feature to back up an encrypted version of their Coinbase Wallet’s private keys to their personal cloud storage accounts. This feature is meant to help safeguard a user from forever losing their private keys by making it easily and securely accessible from the cloud.
Never Lose Your Private Keys
Per Coinbase’s announcement, the ability to store your private keys on Google Drive and iCloud will help avoid losing access and being locked out of your account. In the past, there have been many users who simply do not back up their private keys, misplace their private keys, or store them in an insecure way where they get stolen or destroyed.
As put by Coinbase:
“The private keys generated and stored on your mobile device are the only way to access your funds on the blockchain. Owners of ‘user-controlled wallets’ like Coinbase Wallet sometimes lose their devices or fail to backup their 12-word recovery phrase in a safe place, thus losing their funds forever.”
Private keys are of vital importance to securing and accessing your cryptocurrency, and thanks to the new cloud storage support, users have a failsafe for recovering their private keys via the cloud.
Security of Storing Private Keys on the Cloud
Physically writing your private key recovery phrase on a piece of paper and storing it in a safety deposit box is arguably the safest way to store them, but storing private keys online in the cloud is actually very secure as well.
The Coinbase Wallet can purportedly back up a user’s private key recovery phrase with AES-256-GCM encryption, which is only accessible via the Coinbase Wallet mobile app.
Upon backing the keys up to the cloud, a user will create a new password to access them, should they need. This password is used via the Wallet’s mobile app to unlock the encryption and access the private keys.
In addition to this new Coinbase wallet password, the private keys are doubly protected because they are stored in the user’s Google Drive or iCloud, which is protected by the user’s Google or Apple password as well as other protective measures.
For instance, users can set their cloud security up with 2-factor authentication (2FA) and utilize location-based verification to provide extra layers of protection.
Moreover, Coinbase and the cloud services will never have access to the stored private keys because they are only accessible via the user’s Coinbase Wallet password they create when setting up the cloud storage service.
All in all, if the proper steps and precautions are taken when setting this feature up, storing your Coinbase Wallet private keys on the cloud can be very secure and convenient.
Would you use the cloud to store your private keys, or is storing them on a piece of paper in a safe place better? Let us know what you think in the comment section below.
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