Coinbase Thinks It’s a Good Idea to Backup Private Keys to the Cloud

On Tuesday (February 12th), cryptocurrency exchange Coinbase said that the Coinbase Wallet app for iOS and Android had been enhanced such that it was now for users to backup an encrypted copy of their private keys to the cloud (iCloud in the case of iOS users and Google Drive in the case of Android users).

Exactly one week after launching Bitcoin (BTC) support on Coinbase Wallet (formerly known as "Toshi"), Coinbase announced that it was "introducing cloud backup for your private keys on Coinbase Wallet". Here is the tweet Coinbase sent out:

According to the blog post by Coinbase Wallet Product Lead Siddharth Coelho-Prabhu, this new feature "provides a safeguard for users, helping them avoid losing their funds if they lose their device or misplace their private keys."

Coinbase thinks although it is great that Coinbase Wallet allows users to experience "the full power of an open financial system" (i.e. " storing their own funds and accessing them anywhere in the world"), this power comes with "great responsibility." Since private keys, which are "generated and stored on your mobile device", are "the only way to access your funds on the blockchain" and owns of non-custodial wallets such as Coinbase Wallet "sometimes lose their devices or fail to backup their 12 word recovery phrase in a safe place, thereby "losing their funds forever," it would be a good for users of Coinbase Wallet to use cloud backup for their private keys, and it is now providing a feature that enables just that.

The new opt-in cloud backup feature provides "the ability to store an encrypted copy of your recovery phrase on your personal cloud account." You will, of course, need to come up with a strong password and a way to remember it somehow, but if "you lose your device or get signed out of the app," you will be able to "easily regain access to your funds with the combination of your personal cloud account (iCloud or Google Drive) and your password."

Coinbase wants you to know that this backup is "encrypted with AES-256-GCM encryption and accessible only by the Coinbase Wallet mobile app." And of course, if you lose the password for this backup, the support staff of Coinbase or your cloud service provider will not be able to help you since they don't keep a copy of this password:

"Coinbase will not have access to your password or funds at any time, preserving your privacy and control. Your cloud backup provider will also not have access to your funds, as only you know the password that decrypts your encrypted recovery phrase."

Although this feature currently only "supports iCloud on iOS devices and Google Drive on Android devices," Coinbase plans "to add support for other cloud services in the future."

Coinbase also wants to remind users that this feature is completely optional and needs to be explicitly activated. Also, it recommends that users also "backup their passphrase manually" after cloud backup activation and "activate Two-Factor Authentication on your personal Google or iCloud accounts to make those accounts harder for attackers to compromise."

Amongst experienced long-time investors in crypto, especially those who strong believe in its ideas of decentralization and self-sovereignty, the reactions on Twitters were quite negative. Here are a few examples:

 

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Zcash Blockchain Set for Redesign; Facebook’s Calibra to Hire Head of Data Science

The top daily news from the cryptocurrency and blockchain space:

  • Zcash blockchain set for major redesign.
  • Facebook’s Calibra posts for Head of Data Science.
  • Binance DEX gets its first stablecoin trading pair.

At the time of writing, bitcoin (BTC) and ether (ETH) are trading at $10,809.4 (+0.5%) and $307.0 (-2.9%), respectively. As for the MVIS CryptoCompare Digital Assets 10 Index, it is currently tracking at 4,815.8 (-1.4%).

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Zcash Blockchain Set for Major Redesign

The Electric Coin Company (ECC), the entity steering the development of the Zcash blockchain, is reportedly planning to make the privacy-oriented cryptocurrency as user-friendly as cash payments.

Covering topics such as funding and scalability via sharding, the future of Zcash was presented on and discussed over the weekend at Zcon1, an annual Zcash-focused conference.

Facebook’s Calibra Posts for Head of Data Science

Continuing to build out its team, Calibra – a recently announced subsidiary of Facebook – posted a job position for a Head of Data Science on Saturday.

Per the job description on LinkedIn, the ideal candidate will be “an experienced analytics leader for [Facebook’s] entire consumer-facing wallet product.” This wallet will be the first product to come out of Calibra, which is building financial services atop the ecosystem surrounding Libra, a digital currency initiative announced by the social media giant last week.

Binance DEX Gets First Stablecoin Trading Pair

Stably, a blockchain startup that creates fiat-backed stablecoins on multiple protocols, announced the launch of its U.S. dollar-backed stablecoin – USDSB – trading pair on Binance and Binance DEX.

The announcement marked the first stablecoin to launch on Binance DEX. According to a blog post from Stably, the Binance DEX listing enables “other Binance Chain projects to establish transparent, liquid, and stable on-chain trading pairs.”

While just one cryptocurrency – Binance Coin (BNB) – is paired against USDSB for the time being, Stably said that it is “planning to list USDSB with additional assets on Binance DEX very soon.”