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Announcing Ethereum and Litecoin vaults
- LordOfRiverRun 9y agoIsn't this just security theater? Does moving coins to one of their "vaults" actually do anything in the event coinbase is hacked?
- detaro 9y agoI don't think that's what they are intended to defend against. They are supposed to help if your login data gets compromised.
- 0xdada 9y agoIt's not theater. These features will do nothing if Coinbase is hacked but they can prevent your coins being stolen if someone compromises you.
- billmalarky 9y agoMoreover, Coinbase has insurance that protects your assets against Coinbase getting compromised (FDIC for USD and an insurance policy through Lloyd's of London for crypto). If _you_ are at fault for your account being compromised (ie someone steals your password) then you are not protected by these insurance policies. That's why this new vault functionality is so important, it protects your assets from personal negligence. With these new features, all your bases are covered.
- korzun 9y agoThis could get hairy, very quickly. I thought Coinbase had insurance that only covered the online portion but not offline vaults, where most of the 'money' is stored? If an offline vault is compromised through their system then what? The promise of keeping things separate doesn't guarantee anything.
- mjhoyer 9y agoNot exactly. 'All digital currency that Coinbase holds online is fully insured. 'Coinbase holds less than 2% of customer funds online. The rest is held in offline storage.' They only insure less than 2% of their coins. This does nothing to protect private keys that go missing or are destroyed in their offline wallets. I would love to know that I'm wrong. https://support.coinbase.com/customer/portal/articles/1662379-how-is-coinbase-insured- https://support.coinbase.com/customer/portal/articles/166237...
- billmalarky 9y agoI'm not associated with Coinbase so my knowledge extends to that same article you linked. You appear to be correct so far as the text of the article goes. In the future I imagine crypto wealth will be secured by breaking it into multiple wallets stored in vaults controlled by different organizations. That protects you from total asset loss due to institutional failure. And this type of failure isn't limited to crypto (see Bernie Madoff's hedgefund).
- IkmoIkmo 9y agoWhen they say vaults, they're actually vaults. 98%, according to them, of their funds are stored offline. The only attack vectors are cryptographically, which you can pretty much rule out (safe for human error), and some kind of human attack. (blackmail, social engineering etc) But there's procedures in place there, too. The offline keys are multi-signature, requiring multiple executives in multiple locations to clear industry security protocols, then come together and commit a crime. The remaining 2% of online funds are insured. If anything goes wrong, it's extremely likely to be on the customer side. They offer the usual secure connections, multisig etc, and the vault adds an extra 48h withdrawal period ontop. If you know the basics of bitcoin's cryptography, it's pretty trivial to store bitcoins on private keys that never saw the light of day, using a bunch of dice and an offline open source bit of software. But if you have to use a service, I'd say Coinbase is pretty damn secure. Just make sure your side's clean. Accessing secure systems from compromised phones/laptops is a losing battle, and as there's no real recourse with bitcoin, that's usually where things go wrong even when using secure services.
- s17n 9y ago> If anything goes wrong, it's extremely likely to be on the customer side. Since this is also true of their ordinary wallet product, I think "security theatre" isn't totally unfair here. The only thing this really adds is the 48 hour delay.
- thinkloop 9y agoAnyone have any idea of the specific mechanics they use to withdraw from the vault? Do several executives meet in a special room at a certain hour, with their keys on paper/usb, and type them into an air-gapped machine one-by-one? I wonder how they handle a lost key, do they have to move $1 billion+ of Bitcoin to a new wallet each time?
- gst 9y agoThere are a lot of things outside of technical issues that can go wrong - here's an example: https://www.reddit.com/r/CoinBase/comments/6hcu0n/coinbase_cuba_lawsuit/ https://www.reddit.com/r/CoinBase/comments/6hcu0n/coinbase_c... If you have control over your own keys (such as in the case of the "old" Coinbase vault) those things are a non-issue. But with the way how the new vault works a hardware wallet looks like a better solution.
- toomim 9y agoIt's not for coinbase being hacked. It's for the much more common case of user accounts being hacked.
- homakov 9y agoEven if it's an offline wallet, who said a physical attack isn't an option? Governments get nasty sometimes.
- dream42 9y agoOur coins will be not more secure with their "vaults"
- Cshelton 9y agoWell until CoinBase is hacked and there is nothing left FOR you to withdraw. Just as with fiat USD, depositing it into any third party that is not FDIC is silly. Same here, however there is no FDIC like entity to return your money, so the only true secure way is to only hold them yourself. Of course that makes mass adoption much more difficult... Until Gov. Treasuries and central banks really jump into the game...
- reefoctopus 9y agohttps://support.coinbase.com/customer/portal/articles/1662379-how-is-coinbase-insured- https://support.coinbase.com/customer/portal/articles/166237...
- Cshelton 9y agoYes, because that is always a guarantee... And that's a big maybe and eventually...
- deleted 9y ago[deleted]
- elorm 9y agoFor those who might be a bit confused...... This feature will not make your coins more secure or prevent coinbase from being hacked. However your coins will most likely be moved to "Cold storage" which will make your coins extremely difficult to steal in the event that either coinbase or your account is breached. As far as cryptocurrency exchanges go, Coinbase is among the most secure, practicing what they call "Paranoid Security". Brian has written about it in the past. https://engineering.coinbase.com/how-coinbase-builds-secure-infrastructure-to-store-bitcoin-in-the-cloud-30a6504e40ba https://engineering.coinbase.com/how-coinbase-builds-secure-...
- eugeniub 9y agoIf it makes your coins extremely difficult to steal in the event that either coinbase or your account is breached, isn't that by definition making your coins more secure?
- bhouston 9y agoWhat happens if cold storage burns down.
- robtaylor 9y agoit becomes quite warm storage
- anaganisk 9y agook that brokw the Ice :D
- Guvante 9y agoBackups are important whether the thing being backed up is online or not.
- elorm 9y agoI don't believe they use the traditional cold storage methods anymore(Usb/Device in a phyiscal vault or paper in a physical vault etc). They generate the keys offline and split the keys using a secret sharing method among a quorom of keyholders. So they are geographically dispersed and if one subset on keys were to be lost, there's still a possibility of regenerating by obtaining the other sets from the Quorom
- tommoor 9y agoLove that the example screenshot has $125k in funds knocking about on coinbase.
- dom96 9y agoSo this almost made me register for a Coinbase account to finally buy some Bitcoins. That is until I got to the ID verification section. Am I wrong to be worried about uploading a picture of my passport to a US company?
- em3rgent0rdr 9y agoWell you sortof for legal compliance of "know your customer" laws. I wouldn't be too worried...there are many other things to be worried about...I don't think this ranks too high in the grand scheme.
- Klathmon 9y agoPersonally I would only ever buy from somewhere that requires photo ID. An exchange that doesn't follow KYC laws is at the very least under threat of being shut down by the US. It's part of the reason why I like coinbase so much, they are clearly following all the required laws.
- sayurichick 9y agoI wouldn't use Coinbase to buy BTC. The IRS already tried to obtain all customer data before, and they conceded with "only customers who spend over $20,000". Even outside of privacy issues, Coinbase goes down during critical periods often. Price crashing and you want to buy/sell quick? The site will likely be down. Outside of accessibility issues, Having Bitcoin on coinbase is more like an I-O-U and defeats the purpose of cryptocurrency imo, which is having the private keys to your funds which only you control. I recommend this guide to set a multisignature wallet through CoPay and Glidera. And managing your keys with a password manager like Enpass. https://gist.github.com/paOol/d6c78c339cc5c4df6dd745d3bc2cc522 https://gist.github.com/paOol/d6c78c339cc5c4df6dd745d3bc2cc5...
- egypturnash 9y agoOut of curiosity, where do you recommend buying BTC?
- androng 9y agoWow, at first I was impressed because I have used Coinbase's multi-sig BTC vaults in the past and those were the real deal. As in, they allowed for security and convenience. One key with Coinbase, one key with user, and the third key in your bank vault or somewhere hard to reach. All generated client-side. It protected against Coinbase being hacked, but still offered convenience. This product is the opposite! One-key. Same security (in terms of Coinbase being hacked) and less convenience than the regular wallet! In fact they even took the multi-sig BTC wallet away. You used to be able to create more than one multi-sig BTC wallet in your Coinbase account. Now I only have one and I don't see an option to create another. Maybe in practice, the risk of people getting phished is much higher than the risk of Coinbase getting hacked.
- sputknick 9y agoThey have MFA at the account level. Serious question: is what you described more secure than that? These vaults mean they take coins offline, so it becomes a physical security task to secure them.
- deleted 9y ago[deleted]
- androng 9y agoYes, a multi-sig wallet is more secure. With the multi-sig wallets, even if someone infiltrated Coinbase's offline coins, the hacker STILL would not be able to steal the coins. With these new "multi-email" wallets, the hacker would. This is all assuming that the user can manage his two keys better than two email accounts. In fact, the multi-sig wallets were nice too because you could retrieve your coins even in the case where Coinbase went away completely. e.g. if they pulled a Cryptsy or a BTCe
- PKop 9y agoIf you don't exclusively own the keys, then you don't own the Bitcoin.
- gst 9y agoDidn't have a multisig BTC wallet before (created one in the past, but deleted it months ago) and I don't seem to be able to add another multisig wallet - only those multi-email-confirmation-required wallets. Not holding the keys for my own coins is not an option (see https://www.youtube.com/watch?v=vt-zXEsJ61U https://www.youtube.com/watch?v=vt-zXEsJ61U for why), but at least there are alternatives such as Ledger hardware wallets.
- d23 9y agoJust to warn folks, if they for whatever reason do something that makes want to get your money out, like not supporting a fork, the withdrawal delay on vaults can hinder your ability to get your funds out in time. Make sure if you do this that you stay on top of any future time-sensitive announcements they make so you can withdraw in time.
- cvsh 9y agoIt's a tough catch-22. Cryptocurrencies are so volatile that there's a non-negligible risk that locking away a large sum for 48 hours could potentially cost you nearly all of it. And they're so hackable that not putting a time delay on withdrawals could also potentially cost you all of it.
- QAPereo 9y agoIs there some reason that a bank safety deposit box isn’t the gold standard?
- bastawhiz 9y agoSafety deposit boxes are subject to many problems, most notably human error. Death certificate fraud is far more common that you'd imagine. I would bet that far more has been stolen from safety deposit boxes through social engineering and fraud than from hacking cold storage systems.