Crypto Private Key Generator: A Look Under the Hardware Wallet Hood for User Safety
With such a stark rise in crypto related hacks in 2018, a need for protection has never been more vital.
Though most people use crypto wallets, the more experienced crypto users are more likely to swear by hardware wallets. It makes a certain amount of sense, keeping something digital hidden in something physical you can choose to disconnect from the internet.
With private keys in hot wallets being so vulnerable to attack, it’s no wonder experienced crypto users have gravitated towards more private options available. But how protected is a hardware wallet and is there another option out there?
The Safety Of Hardware Wallets
Hardware wallets are tailored to Crypto storage and payments, keeping crypto information stored on a small physical device with the key being stored offline. While being offline has a clear advantage, it does not mean private keys are 100% protected from all security risks.
The main issue is stealing the device itself. If a small physical piece of hardware stores the private keys to a large amount of cryptocurrency, it would be vulnerable to a new “owner” taking it over. It becomes essentially no different than storing physical money or valuable objects in a personal safe.
Any and all storage devices are hackable. Even $100 ones you can buy have warning from the manufacturer basically telling you not to let anyone else get their hands on it because it is not protected from intrusion were someone (or the government) to take it.
Crypto Key Generator
Bitfi is a crypto payment technology that allows users to have a hardware wallet without a private key and does not store data at all. Its purpose is as a key generator.
You create your wallet with a salt and passphrase, then to gain access to the wallet, a temporary private key is generated. If the salt, passphrase, and a temporary private key is all in order then access to the wallet is granted (through a series of complex algorithms).
The salt and passphrase are never stored and the private key is always randomly generated on the spot, useful only the moment a transaction needs to be approved. The wallet, itself, is completely devoid of data at all times.
Nothing Is Safe
The creator of Bitfi technology, John McAfee, was quoted saying his device was completely unhackable in 2018. Unfortunately, media mistook what he meant to mean that it was literally unable to be hacked.
Every device can be hacked. What he meant is it would essentially equate to breaking into an empty vault because nothing is stored in the wallet itself, so who would expend that kind of energy and why.
When a normal hardware wallet is hacked, anything stored inside is up for grabs. But having no data stored in Bitfi wallets means your cryptocurrency is always safe (at least from that kind of theft).
So while of course McAfee’s device can be hacked like anything else, following his logic is actually incredibly sound and correct- nothing is at risk if the device does not store your private keys.