With all the news about hacking and lost cryptocurrencies, people are looking for safe alternatives for storing their Bitcoin and other currencies. The “Hot” alternative at the moment is so-called “hardware wallets”, these tend to be a much better alternative than centralised wallets like those on exchanges or provided by popular providers.
It seems though that some Bitcoin owners are confused about where their coins are kept. It is important to understand that your cryptocurrency never leaves the blockchain, so coins are not kept “in a wallet”. What the wallet actually does is it keeps a copy of your private key and it communicates to the blockchain via instructions sent through a server called a Blockchain explorer. A blockchain explorer is a service that can look at / explore the blockchain and it can also send messages to and relay messages from the blockchain.
One of the most popular blockchain explorers is – a service called Blockchain.info. This is a large trusted organisation and as such many wallet providers use their explorer to facilitate transactions.
What happens when this explorer goes down?
This is exactly what happened in October 2016, when Blockchain.info was the target of a DDOS, Direct Denial of Service Attack, which took the site down for a couple of hours. In today’s volatile Bitcoin world this could spell disaster for a Bitcoin trader and what happens when this continued for days?
We did some digging and the problem with most hardware wallet solutions is that they rely on the Blockchain.info API.
Currently, Blockchain.info has more than 22 Million users and like we said most of the Hardware wallets use their API. This means that in the event of an attack and the site going down again millions of users could be left without the ability to transfer funds until the site is repaired.
It is interesting that at Swiss Bank in Your Pocket, the developers have taken this into account and has built contingency plans against blockchain explorer outages.
These are in place for the Swiss Bank in Your Pocket Hardware Wallet as well as the Embedded Vault.
A customized Blockchain explorer built for every currency. The company developing these products have been criticized for being “slow” in rolling out access to new currencies but there is a very good reason for this.
Instead of taking a shortcut and just using an available API, the company codes its own Blockchain Explorer for every currency. These are run on a number of backup servers and the IP addresses are not known to the public thus making an attack very unlikely.
Well-known websites like Blockchain.info are unfortunately a prime target for hackers, thus the use of anonymous servers to mitigate this risk.
Backup explorers in place, that can facilitate transactions in the unlikely event of the main explorer being down.
In addition to the main blockchain explorer the company builds for every currency supported;
Another level of backup is in place via third-party API’s these would kick in if the main explorer and all the backups go down.
In most cases, there are 2 or sometimes even 3 backup explorers for every currency.
It is important to understand in the world of cryptocurrency, that “what you see is not always what you get”.
It is clear that the developers at Embedded Downloads have thought through the process and it might be worthwhile to consider their product because of these salient features that provide additional protection.
Embedded Downloads specialize in developing hardware and software security solutions for IoT, Internet of Things, devices, and the company further specializes in enterprise and military grade security levels.
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