How Biometric Sensors and Hardware Wallets are Shaping the Future of Digital Currency Storage
Welcome to the fourth and final post in our series on Central Bank Digital Currency (CBDC). In this post, Art Stewart, Global Head of Sales & Marketing at IDEX Biometrics, talks about how biometric sensors and hardware wallets can provide solutions for digital currency storage.
The online and electronic nature of modern society requires robust and safe means to store and transfer money, but the current options are nowhere near achieving it. Electronic card payments, bank transfers, online payment gateways, PayPal, Bitcoin and smartphone wallet apps all suffer from drawbacks.
They entail substantial overheads in bank charges, equipment, commissions and other costs, and are often hacked or used for fraud, tax evasion and money laundering. There are a few possible solutions on the horizon but none of them offer the security and ultimate convenience of fingerprint biometrics.
One thing that cryptocurrencies like Bitcoin have in common with electronic transfers of traditional money like the dollar, euro or pound, is their high dependence on remote networked resources. Bitcoin verification is distributed, while traditional currency transactions depend on gateways, banks and clearing houses, but both are frequently tricked into unauthorized transfers of value.
That again draws our attention to their similarity. When banks make traditional accounts accessible over a network, even a restricted one, they effectively put your real cash online. Similarly, whether your Bitcoins are on a distant server, such as an exchange, or on your own connected device, your real cash is online.
A traditional solution for people who didn’t trust banks with their money was to keep cash in the home. Believe it or not, they tried the same with Bitcoins – by letting you replace the files that store your block-chain keys onto paper that you can hide in the “real” world. The disadvantages are the same in both cases.
The most obvious way to prevent assets being stolen is to store them safe from network access in some form of offline hardware wallet. There are a whole range of such devices: some look like ordinary thumb drives while others are more sophisticated. They offer multiple benefits, including portability and a compact size which assures discretion, thereby improving safety during transactions.
Like deposit accounts versus current accounts, hardware wallets are a wiser option than live software or “hot” wallets for long term storage of digital currencies. Without the need for a live internet connection, cyber risks are eliminated which accounts for the growing uptake of cold wallets.
A biometric fingerprint sensor provides the ultimate solution to protecting stored value on cold wallets
Biometric fingerprint sensors can add an extremely robust layer of additional authentication to every device access or digital transfer. They create a strong bond between user and the card based wallet without sacrificing the ultimate convenience of quick, easy, contactless transactions.
Your unique biometric details are one of the few things that neither offline thieves nor online cybercriminals can readily steal, so however your digital assets are accessed, a cost-effective lightweight and offline verification tool can now be safe in your back pocket at all times.
The previous post in our series on Central Bank Digital Currency (CBDC) talks about the best option for crypto storage – is it hot or cold wallet?