Preface
Nowadays, resolving security issues has become Priority #1 in the crypto industry. It won’t hurt to recall the cases of massive hacker attacks on centralized exchanges that made users lost huge amounts of funds due to security breaches. If it’s pretty clear with centralized services, then what about cryptocurrency wallets?
Crypto wallets and their security
The hype around crypto has activated scammers and frauds looking for quick and easy methods to take advantage of credulous users’ funds.
Custody risks related to the centralized crypto services have made people to find robust means to securely store their funds, and the means are to be invulnerable to hacker attacks.
Main limitations of the centralized exchange platforms:
- Most of the crypto exchanges are centralized and prone to hacking.
- They are also frequently exposed to DDoS-attacks.
- Sometimes you can’t get instant access to your funds due to the technical issues or overload maintenance.
- KYC and AML requirements. Daily withdrawal limits.
These risks endanger the safety of your funds, may cause inconvenience, or give you a sense of insecurity.
The best way to keep cryptocurrency in this situation is to use wallets.
These wallets are similar to safes, except that all your funds are encrypted in the blockchain. Just like you open the safe with a code, you get access to your funds using your seed phrase.
How do they work?
- Your information is collected from blockchains and updated in real-time.
- The wallet enables you to manage and store data about different assets.
- Your balance is always displayed in real-time, so you can easily transfer your funds to another wallet or swap between different assets.
Small tip: You can store a larger amount of your funds on the cryptocurrency wallet, and also store a smaller part on exchanges for everyday use to prevent yourself from hacking and vulnerabilities of the centralized exchanges.
Cryptocurrency storage methods
There are two main types of cryptocurrency storage — cold and hot storage.
The hot method enables you to manage your crypto online and spend it at any time. Such wallets require access to the Internet, as they are supporting permanent connection with the blockchain.
The cold method represents a hardware wallet designed for funds storage without the need for internet connection. You can use a personal computer, phone, flash card or just a piece of paper. However, the hardware wallets are considered to be the most secure.
Choosing the proper secure wallet is an important and responsible step. You must realize that the security of your cryptocurrency assets depends directly on your choice. The most reliable method of storage is when you get full control over your funds, i.e. own the private key.
Atomic Wallet is a cold wallet type, all passwords and data are stored on the user’s device and it is not kept at any server, so there is no custody risks or the possibility of losing funds through centralized services. The main risk in Atomic Wallet is if you lose your backup phrase or send it to another person.
Private password
The first stage of Atomic security is a password. The user creates it by himself, the password is required to confirm transactions, to view the list of your private keys and it serves as the primary protection against unauthorized use of the wallet by another person.
But what if you’ve lost your password? Well, here comes the second security stage in the Atomic Wallet Security system — the 12-word Backup Phrase.
Backup Phrase
Example: moment trade hip flavor peanut eye expose front mystery supreme hotel security
Randomly generated 12-word Backup Phrase will help you to restore access to your Atomic Wallet at any time. It is vital not to lose this phrase, store it in a secure and inaccessible to other people’s place. You can even write it down or print it on a sheet of paper.
How does it work?
This 12-word phrase is a cipher that contains information about private keys and addresses. Seed decipher all symbols for each coin. So with 1 seed, you can gain access to all your funds.
Randomly generated 12-word Backup Phrase will help you to restore access to your Atomic Wallet at any time. It is vital not to lose this phrase, store it in a secure and inaccessible to other people’s place. You can even write it down or print it on a sheet of paper.
Encryption
In Atomic Wallet, all data stored on the user device or sent when interacting with blockchains is fully encrypted. Local data secured with AES symmetric encryption algorithm and the data which is transferred via BitTorrent protocol or interacting with blockchains are secured with TLS asymmetric encryption.
Advanced Encryption Standard (AES) is a symmetric block cipher chosen by the U.S. government to protect classified information and is implemented in software and hardware throughout the world to encrypt sensitive data.
Transport Layer Security (TLS) is a protocol that provides privacy and data integrity between two communicating applications. It’s the most widely deployed security protocol used today and is used for Web browsers and other applications that require data to be securely exchanged over a network, such as file transfers, VPN connections, instant messaging and voice over IP.
Conclusion
Your safety is fully in your hands. We do not store any data on any servers, we do not store private keys and we do not have access to them. Therefore, it is the users themselves who are responsible for maintaining their password and backup phrase.
At the same time, Atomic Wallet is a combination of complicated cutting-edge technologies, design and security solutions. We built up a fully secure and convenient platform for users that can protect their funds and keep them in a safe place. We chose the way of decentralization, which always corresponded to the spirit of the cryptocurrency. Yes, there are certain drawbacks, but we are fully confident that our platform will attract the attention of many people, our wallet is simple, easy to use, supports a huge number of assets and implement an Atomic Swap technology.
