Monday, January 20, 2020

With Crypto Malware on the Rise, Offline Asset Storage is Becoming a Priority

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Mark Hartley
Mark Hartley is a freelance writer, blockchain researcher, and cryptocurrency enthusiast.

Forbes magazine recently revealed the rise in cryptocurrency-related malware that has been affecting the industry since Bitcoin tripled in price since the start of the year.

In particular, a strain of malware called InnfiRAT has been discovered by Zscaler’s ThreatLabZ team. The malware is a type of RAT, or remote access trojan, that steals a user’s information but searching for wallet.dat files and secretly sending them back to the hackers. The type of malware is distributed through infected links sent via email or other messaging services and has recently been heavily-focussed on cryptocurrency wallet owners.

While the malware itself doesn’t steal any cryptocurrency, it can steal sensitive user data that could then be used to access a digital wallet. Online, web-based wallets are particularly susceptible to these types of attacks, making it more pertinent than ever to use offline, cold-storage for digital assets. However, storing cryptocurrency offline can be inconvenient for day traders or other users who wish to use their cryptocurrency on a daily basis.

Israeli startup GK8 develops offline crypto storage with online connectivity

To address the issue of offline crypto storage with online access, an Israeli startup called GK8 has developed an offline, cold-storage crypto wallet that has online accessibility. The wallet achieves this by using an integrated circuit (IC) that is isolated from any hardware device and by sending transaction information in only a singular direction.

Although relatively unknown, GK8 benefits from an impressive list of cryptography experts amongst its board members, including Eran Tromer, a Zcash co-founder and associate professor at Tel Aviv University’s School of Computer Science. In a video presenting the new wallet, Tromer speaks of how their solution minimizes the attack surface using unidirectional communication.

“GK8’s cold wallet solution improves on the state-of-the-art by having essentially unidirectional communication from the wallet to the outside and never accepting raw information from the outside back into the cold wallet,” he states.

VELAS Digital Wallet uses AI for enhanced security

Another startup that has recently launched two highly-secure offline and online wallet solutions is the Swiss-based Velas AG. Earlier this year, Velas AG launched its VELAS blockchain network, which utilizes artificial intuition to ensure a high degree of efficiency and security.

Through its use of AI enhancement, VELAS (Virtual Expanding Learning Autonomous System) can provide increased fault tolerance and uninterrupted block formation. The company will be releasing both a web-based and desktop wallet as well as a ‘node staker’ option that rewards users for their ongoing participation on the network.

“We are excited to launch our Velas pre-alpha mainnet blockchain, powered by artificial intuition and now we’ve made available our desktop and web wallets, along with staking for network contributors who are looking to set up a masternode,” said Alex Alexandrov, CEO of Velas and crypto payment platform CoinPayments. 

The web-based wallet benefits from both two-factor authentication and RSA-256-CBC encryption, which securely stores mnemonic wallet-creation data and provides near-impenetrable protection against theft or illicit data usage. The VELAS desktop wallet supports Windows, MacOS, and Linux and offers additional security over the web wallet by avoiding web-based attacks like phishing, IP spoofing, and XSS. Additionally, users of the desktop wallet can also choose the specific currency they wish to use when conducting transactions, with constant exchange rate updates provided by Velas.

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