How the Wirex Wallet protects your digital assets
Wirex has made its mission to bridge the gap between the traditional financial sector and cutting edge blockchain technologies. The launch of the Wirex Wallet heralds the start of a new era, one in which the benefits of decentralised finance (DeFi) finally become available to mainstream consumers. The sleek, streamlined interface of Wirex Wallet offers a seamless user experience to securely store digital assets, such as cryptocurrencies and non-fungible tokens (NFTs), a well as to earn passive income by staking tokens in DeFi protocols Compound and Aave.
Designed for synthesis between security and user experience, Wirex Wallet uses innovative solutions to protect digital assets from opportunistic hackers taking advantage of the surge of interest in cryptocurrencies.
The news has become saturated with stories of crypto heists. Earlier this month, hackers made off with at least $150 million from crypto exchange Bitmart. A few days ago, 96 private keys were stolen from custodial gaming wallet Vulcan Forged, amounting to a theft of $140 million. And a Bitcoin trader recently shared the unfortunate consequences of seed phrase theft, which resulted in a loss of 33 BTC – nearly $2 million.
How does Wirex Wallet protect digital assets from the same pitfalls?
Removing the single point of failure
In each of these examples, there was a single point of failure leading to devastating losses. Private keys can be stolen, seed phrases can be hacked, and worst of all, there’s almost no chance of recovery. Even non-custodial, “cold” wallets are susceptible to scams, such as the fake Ledger hardware wallets sent to victims of the customer data hack in 2020. Not to mention, of course, that even if digital assets are stored offline in legitimate cold wallets, they must be moved to an online “hot” wallet to complete any transaction, leaving them exposed and vulnerable.
Increasing security with Multi-Party Computation
The Wirex Wallet has an alternative solution. Instead of private keys or seed phrases, it uses biometrics and a set of secrets distributed by the multi-party computation (MPC) cryptographic protocol. The benefit of biometry is twofold. As well as removing the need for backup – wallet holders are always able to prove their identity – it is used to generate secrets whenever users access the Wirex Wallet. The secrets generated are then divided across a number of parties, chosen by the user, which independently store and process one of the set of secrets. These parties can be anything from a cold wallet, financial institution, or a trusted friend or family member, but none are able to perform any transaction independently.
Crucially, dividing the computation containing the set of secrets among multiple parties renders each individual data point meaningless on its own, thereby avoiding a single point of failure. This approach not only decreases the risk of theft, but likewise offers flexibility in security management. The user is able to determine a hierarchy of secrets, configuring different signatories for various use cases. For example, if the user wishes to facilitate a transfer of funds, a quorum of all signatories may be required, whereas for online shopping, perhaps only half must co-sign.
Improving overall user experience
Without a single point of failure, digital assets remain secure. The Wirex Wallet’s flexibility enhances user experience while ensuring equilibrium between security and ease of use. Relying on biometry offers easy recovery with no need for backups. Ultimately, a wallet using a keyless entry system secured by MPC and biometrics meets consumer demand for full ownership of their digital assets while offering optimum protection against illicit activity. And as the popularity of cryptocurrencies and NFTs continues to skyrocket and inevitably attract hackers, scammers, and assorted criminals, it’s critical that users remain informed about the security measures used to safeguard their assets.
Learn more about the Wirex Wallet in the recent Wirex Whitepaper.