Bitfi Establishes Unique Security for Digital Assets

As technology and finance evolve, an increase in digital security is a necessity. Bitfi, based in Asheville, NC provides digital asset security to institutions and hedge funds. The company has developed a new hardware wallet technology that uses a key derivation algorithm to calculate private keys when they are needed. This new technology allows users to protect their crypto holdings without any known attack vector – no stored private keys means that attackers have nothing to get from the hardware.

Why Are Digital Investments Necessary?

Technology-based investments are becoming an increasingly lucrative investment. Digital investments include digital assets such as Bitcoin and Ethereum.

Unfortunately, if digital assets are not secured, due to their rapidly rising value they are increasing the target of hackers and cyber criminals. Additionally, cryptocurrency can become lost when it is locally stored. When Bitcoin emerged, investors used software-based wallets which were frequently hacked. To remedy this problem, hardware wallets were developed which allow storing the private key on a device external to the computer blocking online access. This method is referred to as cold storage. However, cold storage solution still have many flaws, the most prominent being that a kew is stored on physical hardware and therefore any physical access allows extraction of the private key. Users of cold storage hardware wallets must physically guard their device to prevent access.

Bitfi technology eliminates this problem by not storing anything at all, making the device just a computational tool that will calculate the key from a user created input (secret phrase) only when the key is needed. Thus, it makes any physical access a pointless attempt, much like drilling into an empty vault.

Virtual Wallet Security

Cryptocurrency is not secure unless certain precautions are taken. There are several types of wallets available and depending on the quality of security and convenience, some may be better than others.

There are several major types of wallets: paper wallets, software wallets, mobile wallets, and hardware wallets. Mobile wallets are accessible through a variety of mobile devices such as a smartphone, tablet, or even a smart watch. Software wallets may be accessed through the internet, but not on certain mobile devices. Because a mobile device runs hundreds of different apps and is designed to download an unlimited variety of apps, it is not a secure environment. Mobile wallets are typically used for convenience and should never be used for large holdings.

There are two different types of digital keys as well. Digital keys are also called public or private keys that are necessary to send or receive cryptocurrency. A public key is the address to which assets are sent. Private control access to this address, only the holder of the private key can access and move Bitcoin at the public address. If the private key is lost, all cryptocurrency is lost. Since an online wallet can be accessed through a regular web browser, it is subject to cyber threats.

Cold storage hardware wallets are typically protected by a PIN. They are known to be a convenient way to make transactions. Unfortunately, since the wallet is a physical object, the device can be stolen, and the private key extracted using forensic tools. Hardware wallets can also have complexity that can be difficult for beginners to understand.

No-Key Security

Bitfi has created a unique wallet that cannot be stolen. Although the Bitfi hardware device can be stolen, since the hardware never has any stored data, the wallet itself cannot be stolen. What is really unique is that the wallet exists only in the user’s mind and the Bitfi hardware is used to turn what is in the users mind into private keys to interact with blockchains like Bitcoin.

Users sign into the Bitfi Dashboard, where all cryptocurrencies are viewed and managed. A user created secret phrase is typed in whenever any asset needs to be sent, which is then used by the Bitfi device to algorithmically derive the key. Once a transaction is complete, everything that was typed into the Bitfi device, or anything calculated by it is instantly purged and over-written. If the secret phrase is memorized, digital assets exists only in the user’s mind with no way for attackers to ever gain access by either digital or physical means or any other forensic methods.

The new Bitfi 2 hardware wallet is also completely tamper proof using a technique not seen in consumer electronics. Each device is filled with a thermally conductive liquid resin which is cured at high temperature making the circuit board completely inaccessible. If a user is away from their Bitfi 2, they can be sure that it was not altered or modified in their absence.

Basic Protection Tips

Bitfi is a way to provide ultimate security by eliminating the need for storing private keys. For those who still store private keys, there are basic tips that can reduce financial or identity theft. By minimizing the risk of an information leak, this can help keep confidential data private.

1.) Be skeptical.

When using a web wallet, there is an increased risk for hacking. Email attachments and even links may be especially dangerous for those with cryptocurrency. Even email that looks like it’s from a secure bank may be problematic if hackers already have personal information. By double checking the legitimacy of an email, it will cut down on potential hacking.

2.) Use a two-factor authentication.

Multiple authentication checks will also cut down on hacking. When using cryptocurrency exchanges t trade cryptocurrencies, a password will not be enough to safely secure digital investments. A two-factor process requires an additional code from an app like Google Authenticator. Be careful when using public networks. A public network may include an internet connection from the library, a coffee shop, or possibly even a friend’s house.

3.) Minimize public use.

Although this may not always be possible, using a private network with a strong WiFi password is imperative when dealing with cryptocurrencies online.

4.) Split up your currency.

Storing cryptocurrency in an online wallet that is storing a private key online or your computer is very risky. You may want to consider splitting your digital assets across multiple wallets on different computer. This way, if one is compromised, then at least you won’t lose all of it.

Is Cryptocurrency Safe?

Cryptocurrency itself is a digital investment. Storing cryptocurrency, however, can be risky without the right security strategy. Cryptocurrencies are primarily built on blockchain technology, and this may leave some individuals vulnerable.

Wallets that do not require storage of private keys are much more secure. There is no way a hacker can steal the key if it does not exist. If using a Bitfi 2, the secret passphrase must be unique and ideally memorable. This way, all your cryptocurrencies will exist only in your consciousness and nowhere else.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes

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