Cold wallets are fast becoming the go-to devices that securely store crypto assets in light of recent attacks where theft is now the norm.
Cold wallets complement the security paradigm that can only be matched by blockchain and distributed ledger security.
Many users within the cryptocurrency space depend on hot wallets to store their assets.
This majority are the targets of the criminals and bad guys.
We all know how much is lost every day to cyber theft.
On the sidelines of the BTC 2022 conference, we met with Adam Lowe, the Chief Innovation Officer at Arculus which is one of the most secure cold wallets out there.
He provided perceptions of security that we hadn’t noticed before and was gracious with his time as he explained cryptocurrency security concepts that we could all learn from.
What are the prevailing trends that have stifled cryptocurrency security?
With the majority of the modern world being digital, many people have a blind trust in the security and technology they use every day.
Cryptocurrency’s rapid adoption has created an environment where many are jumping in and trusting mainstream technology without evaluating its level of security.
A lot of digital security technology has a password problem and needs to move to multi-factor authentication, which can create the secure level of protection needed to fend off the growing threats of fraud and hacking.
To note, there has already been a loss of about $1.23 billion in cryptocurrency in the first quarter of 2022, a 695% increase from 2021.
Related: 10 Best Bitcoin Wallets
How can digital asset holders maintain security?
There are several ways to maintain security to fight identity theft and online hacking: turn on multi-factor authentication, have a biometric component, use a cold storage wallet and maintain good password hygiene.
What advantages do hardware wallets like Arculus have over software wallets?
The primary advantage is security.
Hardware cold wallets are disconnected from the internet and online servers which means hackers are one step removed from the wallet.
By using a hardware wallet, especially one like Arculus with 3-factor authentication, you create a vault that only you can access – no one else.
Please can you explain the advantages and benefits of the Arculus wallet?
The Arculus Key Card uses a best-in-class CC EAL6+ Secure Element to encrypt and store your keys.
It’s not connected to anything and if you lose it or it gets stolen, no one else can use it but you.
When you choose to make a transaction in your Arculus Wallet App, you will use 3-factors of security authentication — something you are with a biometric, something you know with a PIN and something you own by tapping your Arculus Key Card to your mobile device.
The card communicates with your wallet app via a tap-to-transact secure NFC connection.
No Bluetooth. No Wi-Fi. No USB. No cords. Just security made simple.
How has your background in cybersecurity helped improve the quality and security of the Arculus wallet?
Before CompoSecure and Arculus, I worked with U.S. defense and intelligence communities while a principal scientist at SRC Inc., a non-profit R&D company.
At SRC, I led the company’s Biotechnology Advanced Technology Initiative, developing classified technology.
I was charged with creating disruptive innovation to keep the warfighter and intelligence communities safe.
Myself and my peers created technology with security at the forefront of our minds.
What happens in case of the theft or loss of the Arculus wallet?
If a user’s Arculus card gets lost or stolen, they’ll have to purchase a new Arculus Key Card and use their 12-word recovery phrases to recover their wallet on their phone (or other NFC enabled mobile device).
- 2. Since Arculus uses three-factor authentication, even if someone steals a user’s card, they wouldn’t be able to access your crypto without also having the PIN and biometric. These three factors of authentication act like a vault keeping private keys, and hence crypto, safe and out of the wrong hands.
How does cold storage reduce the odds of the theft of digital assets?
Cold storage, through solutions such as the Arculus Key Card, is one of the safest ways to store cryptocurrency private keys because it is offline and uses a physical device.
On the flip side, because hot storage is online, hackers may have an easier time hacking into hot wallets as compared to cold wallets.
Digital asset storage is advancing and through multi-factor authentication and layers of protection, we can create solutions that can protect crypto and keep a more secure ecosystem.
How has your journey into cryptocurrencies and their allied technologies evolved?
Cryptocurrency and digital assets are still an emerging ecosystem, which creates disruptive innovation and change as new, dominant technologies emerge.
These new technologies that are taking hold of the market generate an overhaul in digital asset safety and security, especially amidst a rise in crypto hacking.
Using easy-to-use cold storage wallets, such as Arculus, can make it simple and intuitive to securely protect and control private keys and crypto-assets apart from any centralized system.
How does the Arculus key card work?
All the crypto keys are stored on this simple, sleek metal card.
The Arculus Key card easily and reliably connects to the Arculus Wallet mobile app by tapping it on the back of the phone, providing increased mobility without sacrificing security or needing to charge the battery.
How does the tap-to-transact NFC connection work?
Consumers are familiar with tapping to pay at the point of sale with their credit cards.
We use that same functionality with Arculus on the phone.
How many digital assets does the Arculus ecosystem support?
Currently, Arculus supports 25 currencies including popular blockchains & tokens such as BTC, ETH and DAI. Supported currencies make up approximately 80% of the crypto market cap.
Are there any plans for extending DeFi capabilities to the Arculus ecosystem?
We have several new innovations on the roadmap for Arculus.
We are introducing wallet connect to allow users to participate in the DeFi space and are adding NFT viewer support to keep NFTs safe.
How has the cryptocurrency industry evolved since the cryptocurrency summer of 2017?
The crypto market was active in 2017 with currencies such as Bitcoin having a world-breaking year that ended in an ultimate crash, but it is now one of the most popular cryptocurrencies.
The world of crypto has become more widespread with over 10,000 different currencies.
Five years ago, there was more confusion surrounding crypto which stemmed from the lack of knowledge of the subject.
Fast forward to now, the masses are catching on because cryptocurrency has made headlines – whether that’s through donations for Ukraine, Biden’s new executive orders on crypto, or countries making crypto the national currency.
Crypto adoption continues to increase with predictions estimating that there will be 1 billion users by the end of 2024.
Which technological solutions do you think will change the cryptocurrency space?
I think the continued migration to new chains and proof-of-stake based systems will continue to drive crypto and the blockchain space.
Options other than Ethereum to arbitrate smart contracts will continue to drive adoption and innovation in the crypto space.
What are your thoughts on Bitcoin’s continued market dominance of the cryptocurrency industry?
I believe Bitcoin will continue to maintain substantive value in the space and remain a very viable player and asset class in the space.
Its first-mover advantage and stable, proven chain design will help it maintain dominance.
Are there any surprises you guys at Arculus have for us at the Bitcoin 2022 conference?
Each of the over 25,000 attendees received an Arculus card in their gift bag at the entrance of the show.
What role will unique identifiers like biometric features and co? play in improving the security of digital assets?
Biometrics improves security because no one can access your assets without your face.
Arculus is one of the only cryptocurrency cold storage cards with 3-factor authentication that includes a biometric.
How secure is a True Random Number Generator (TRNG) as opposed to Pseudo-Random Number Generator (PRNG)?
Creating true randomness is essential to creating truly random keys.
This is important as it prevents an attacker from being able to determine the next set of keys a system generates or possibly replicates existing key sets.
Arculus uses TRNG to maximize the safety of the keys in the platform.
What steps users can take to secure their private keys?
Self-custody is the most important concept for people to understand.
As we discussed in my hardware wallet panel at Bitcoin 2022, as long as someone else is holding the keys to your crypto, you don’t own your own crypto. Our mission at Arculus is to help educate consumers on the importance of taking control of your crypto. Our motto is your keys, your crypto.
How can users onboard the Arculus platform?
You can purchase an Arculus Key Card at www.GetArculus.com,
Then, it’s as simple as downloading the Arculus app on any iOS or Android device for free and pairing it with your Arculus card.
To activate your account, simply present the Arculus Key card to the back of the phone (or other mobile device). From there, create and confirm your 6-digit PIN, present the Arculus card to the back of the phone again, and your 12-word passphrase will be displayed.
Make sure to write down your phrase and keep it stored in a safe place.
You will be asked to re-enter your 12-word passphrase.
To do this, tap on the words in the correct order and they will be populated into the “My Secret Phrase” box. To remove a word from the box, tap on the word and it will go back to the bottom of the screen.
When the secret passphrase is selected correctly, click “Confirm.” Click “Get Started” / “Go to the Home Screen.” Your Arculus Wallet is now activated!