How Smartphones Have the Best Security for Cryptocurrency
There’s a lot of hype around blockchain and cryptocurrency, but one thing that is real, not conjecture, is the cybersecurity offered by smartphones. The oldest application for blockchain is Bitcoin. It introduced the concept of shared ledgers, and since then, developers have been creating more apps for blockchain. At the same time, cryptocurrencies have risen in popularity to the point where national governments are using them and facilitating transactions for their citizens. With all of the funds being transferred, the security of the information and assets is critical.
Digital ledgers ensure that the bits involved in Bitcoin and other cryptocurrency transactions are only in one place at a time. These digital ledgers solve the age-old problem associated with fiat currency. That problem was double spending. Traditional banks were slow to process some transactions, leading to double spending of funds. The software powering cryptocurrency ledgers prevents this from happening.
How a Shared Ledger Works
The key to clean ledgers is the sharing of data. When a cryptocurrency transaction takes place, such as converting BTC to INR, messages transfer the coins from one wallet to another. Those messages use a cryptographic signature with public and private key technology. If one user sends a Bitcoin to another, they do so with a message coded in a particular format and a signature with the recipient’s public key. The sender uses their own private key. The ledger keeps track of this data. The recipient can transfer their Bitcoin to somebody else only if they have the private key that goes with the public key from the original transaction.
Security of Shared Ledgers
You can’t send a Bitcoin or any other coin to the next user if you lose the private key paired with the public key. That’s because there’s no way to prove the coins are yours. The coins end up in a sort of purgatory forever.
What Smartphones Do With Private Keys
Losing a private key means you’re out of luck. If a hacker steals your private key, you’re also out of luck. Safeguarding your private key is an ongoing concern for anyone who trades or invests in cryptocurrency. Your smartphone can be set up with a cryptocurrency wallet that saves private keys. Wallets are available in many configurations, including physical hardware, pieces of paper, apps for phones and desktop apps. There are also online wallet services. Of all these options, smartphone wallets are the simplest solution for short-term and medium-term use. If you have long-term cryptocurrency funds, store the private key offline.
What Gives Smartphone Wallets an Edge on Security
The trusted execution environment is what gives wallet apps for smartphones the edge on cybersecurity for your digital coins. This is a separate processing environment. It has its own memory and storage. This environment is isolated from the rest of the data on your phone. These apps include “trustlets” that mange your private keys.
How Trustlets Work
Private keys in smartphone apps are only accessible through trustlets. There’s no way for malware to extract the key. In order to gain this advantage, you have to use the trusted execution environment. If you just store the key on the regular storage in your smartphone, a hacker can get to it.