Canadian Bank Builds Vaults for Safeguarding Cryptocurrencies
Originally published on: CCN
Read the original article
February 14, 2018
Threats to precious belongings are reasons why they are usually kept in secure environments. These threats may come in the form of theft, natural disaster, fire accidents, unauthorized use, loss, e.t.c. In order to guard against these threats and eventualities, owners take deliberate measures to protect and preserve those belongings that they cherish.
Digital Assets are Drawing Attention
One of the common and most reliable ways of securing personal belongings is by storing them in bank vaults. Therefore, the pronouncement by Canada based bank, VersaBank Inc. of building a vault for cryptocurrencies reveals the importance attached to these digital assets.
Blockchain and cryptocurrencies are in their early stages of development, however, the reactions that events around the ecosystem are generating points towards a whole lot of potentials within the industry. Digital assets are products of blockchains whose ownership depends of the ability to retain the private keys that enable access. These private keys are usually very delicate entities due to the fact that losing them automatically implies losing every coin and asset to which they are tied.
It’s All About Your Private Keys
Losing one private key effectively means that such digital assets, like Bitcoins are lost forever. One may wonder why an entity of such value would be so delicate to protect. The truth is, this system is a part of the security upon which the technology is built. Considering the value that can be stored in a cryptocurrency wallet, stepping down on the security process could have a backfiring effect, leading to rampant cases of property theft.
Most wallets have methods of recovering lost keys, or regaining access to wallets when the private keys are lost or forgotten. For instance, Bitpay’s twelve-word backup phrase can be used to regain access when passwords are forgotten. However, users are always warned to keep such in a safe place and never share it with anyone.
The Story of Lost Coins
The story of James Howells of wales is popular in the Bitcoin world. Howells is known as the man who tossed a hard drive containing 7,500 Bitcoins back in 2013 when the coins were worth very little. The Bitcoins are now lost and cannot be retrieved despite the fortune that those coins may be worth at the moment. Several other coins may have been lost silently either in smaller numbers that won’t make the news, or by other means, including the death of their owners. Such scenarios raise questions concerning how assets of such magnitude in value can be preserved, and even possibly transferred to heirs, in the case of death or incapacitation.
Therefore, considering the present value attached to digital assets and cryptocurrencies, and also the forecast in terms of potential, the actions of VersaBank Inc. is a pointer towards what the ecosystem should expect in the future.
A Digital Vault
On the technology behind the digital vault being created, VersaBank CEO, David Taylor says:
“Our differentiator in this market is to be secure and super private. The bank wouldn’t have any kind of back door to open up the vault, we’re just providing the facility that folks could put their digital keys in.”
This digital vault is being designed by a team of software engineers, led by cybersecurity expert Gurpreet Sahota. The vault will securely store digital assets on computer servers around the world. Like a safety deposit box, the bank won’t know what’s inside and VersaBank cannot access the contents.
Bank vaults are regarded as one of the safest and reliable places to appropriately store precious items and records. As digitals assets gradually make way into the mainstream, more formal and organised methods of administration will be expected, including appropriate methods security and transfer. Apparently, such developments are already upon us.
Featured image from Shutterstock.