Since the launch of Coinbase Wallet a Digital Currency Exchange [DCE], the company has made a significant improvement in their privacy and security. The company has given its users an Open Finance Environment to Currency Exchange.
On February 12th Coinbase Wallet made an official announcement of their service app where users can back up their Coinbase generated encrypted keys on users personal cloud storage platform, whether on a cloud or google drive.
Earlier If the user lost their device or their 12 digit recovery phase the user could lose their Funds forever. By introducing this new feature, the user can upload and backup their encrypted password.
Users can take advantage of their new AES-256-GCM encryption feature which is only available on their Coinbase wallet app to digitally stored and backup their password on cloud platform which can only be encrypted by the user.
As the privacy and security concerns, Coinbase will not have access to this user-generated encrypted key, as this key can only be encrypted by the user itself with the Coinbase app.
Currently, this feature is supported only on cloud-based services like icloud and Google Drive. Cloud-based service is optional, and the user can opt out for this feature. As per the announcement made by the company, more cloud-based support will be added in the future.
Similarly, if the user has multiple accounts registered, then there is no need to remember the phrases for all the reports as the user can save and upload the backup to the cloud account and use it accordingly whenever necessary.
Coinbase is currently one of the biggest companies around, supporting more than 30 countries. As of November 2017, there are more than 13 million users worldwide. With this new feature, the company can strengthen and create an Open Finance environment for the users giving them total control of their Funds while maintaining the security and privacy for the users.
With cloud service like Google and icloud becoming a regular part of the Business process, new security threats are increasing day by day. Companies have to tackle these security threats. Most of the worry lies in the fact that these cloud sharing entities can be subjected to leakage of personal data and user backups. The wise thing would be to use stronger passwords and use the company file encryption system instead of depending on cloud platforms.
While the Cloud services offer you better flexibility, it is critical not to ignore the threat and risks it comes with.