Advantages and disadvantages of storing cryptocurrencies in the cloud

Advantages and disadvantages of storing cryptocurrencies in the cloud

Advantages and disadvantages of CryptoCurrencies

Statistics shows, that the vast majority of virtual coin holders prefer to keep their funds on exchanges and online wallets. Convenience beats cold storage reliability, but can these properties be combined??

Why local storages are disliked

The size blockchain bitcoin in 2019 year tends to the 300 GB mark, although it is not a problem to install a local wallet. The catch is that most of the users do not know how to synchronize the blockchain without downloading the full database. As a result, long synchronization leads to resentment newbies and forces them to abort the installation.

It is worth taking into account that modern trends force a large number of people to abandon stationary PCs at home, leaving only tablets and smartphones, and installing a cold wallet on a portable device loses its sense of reliability. Another reason for distrust of cold storage lies in the lack of knowledge about the correct backup procedure, which is why there is a fear of losing funds due to a computer failure. Taken together, it turns out that in some cases safer shift the responsibility of storing cryptocurrencies to third-party services, one of which is a cloud-based crypto wallet.

Hot cloud

Public crypto moguls sometimes come to the conclusion that it is better to keep their funds away from themselves. What could be next, than virtual cloud? In addition to self-imposed millionaires cloud system can be helpful teams traders, So how to solve the problem of shared remote access to a cryptocurrency wallet.

Decentralized and cloud technologies seem to be antipodes that complement each other. As a result, it turns out that one of the most insecure places for storing digital data becomes reliable without losing convenience. To combine the two properties, the programmers decided to put an entire local wallet in the cloud..

 

For of this they used a remote server. It is accessed via the remote desktop protocol and is supported by all popular operating systems. The server itself is distributed and allows use pre-installed fat wallet with entire database. The closer the full network node is, the better. Thanks to using the data center download the complete blockchain can in an hour, regardless of location. Data protection is provided by the following methods:

  • Communication channel encryption.
  • Each user is allocated a separate operating room system.
  • Low density of cloud computers on a single host.
  • Random host selection with help Russian roulette method.
  • LVM volumes are encrypted.
Advantages and disadvantages of storing cryptocurrencies in the cloud

Host selection is implemented using the Russian roulette method. Process work with a cloud cryptocurrency wallet is no different from a local one. As a result, the service combines the advantages of a hardware and an online wallet:

  • Full control.
  • Confidentiality.
  • Security.
  • Easy to set up.
  • Fast start.
  • Remote access.
  • Physical protection.

The main disadvantage is the price. – from 1500 to 3000 rubles per month.

Trust in the administration

The administration of the service does not have access to the logins and passwords of clients who set up all the necessary keys themselves. Administrator rights are also belong clients, so all access data is in the possession of users. If a assume that one of the hosts decides to use the user’s wallet, he still won’t get access to management. Obstacle on his paths will become encrypted data of LVM volumes.

Obviously, such services should be open source. The distributed method of storing cloud wallets is based on other corporate data centers. Each service host is geographically distributed and connected only to one router. The load on each host does not exceed 6 users, which increases data security.

Criticism

Hacking any OS is just a matter time and money due to the zero-day threat (a vulnerability that has not yet been invented to counter).

 

A crypto-millionaire who disclosed his fortune is bound to be the target of targeted theft of funds, and storing bitcoins in the cloud is likely to be successful. The main vulnerability of the cloud is that hackers constantly have remote access to it and may try different hacking options. because of of this factor, the cloud loses even to an ordinary PC, which disconnects from the Internet at night and cuts off access to itself for 8 hours. In terms of protection methods, the cloud is similar to cryptocurrency exchanges, which are constantly subject to successful attacks..

The question of password encryption also remains vague. If the user configures all the keys himself and does not encrypt them, then can the administrator of such a service get access to the wallet?

Output

Cloud wallet for cryptocurrency is a new tool that combines ease of use with cryptocurrencies, but has not yet proven its reliability. There are not enough reviews of such services yet.

We also recommend that you learn about how correctly store keys and backups of cryptocurrency wallets.

Advantages and disadvantages of storing cryptocurrencies in the cloud

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