Are Keyless Solutions the Answer to Compromised Private Keys?

  • Hackers are using sophisticated software to run passwords against target crypto wallets.
  • Some hacker wallets have been found to have over $50 million in crypto.
  • Keyless crypto solutions help clients avoid the pitfalls of using private keys.

The crypto world is the wild west of the financial industry. Its history is checkered with implausibly audacious heists, some leading to billions of dollars in losses. The immutable blockchain technology that powers crypto networks lacks centralized control and regulations, and hackers strive to take advantage of this inherent loophole.

Bitcoin (₿) is a cryptocurrency. It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.

Security researchers have in the past stumbled upon elaborate hacker syndicates that use advanced brute-force software to crack crypto wallets. Using powerful, sophisticated algorithmic servers, they are able to run millions of pre-generated keys and hacker databases against target cryptocurrency wallets.

In April, researchers at the Security Evaluators agency came across hundreds of compromised crypto addresses while Ethercombing for vulnerable Ethereum wallets. One hacker unit had the capacity to automatically snatch up funds from such wallets within milliseconds of funds being deposited. Its wallets had over $50 million in cryptocurrencies.

How Easy is It to Brute-Force a Bitcoin Address

The answer relies heavily on the length and complexity of the private key. A bitcoin private key is a hexadecimal alphanumeric code that is randomly generated and exceptionally hard to guess. For perspective, it would take the average contemporary personal computer less than a minute to crack a 4-digit numerical key.

But it would take the same computer about 2 centuries to crack a 12-letter password. Using a combination of numbers, upper and lower-case letters, plus special characters will exponentially increase the time taken to guess the private key.

Keyless Solutions on the Rise

Secure multi-party computation is a subfield of cryptography with the goal of creating methods for parties to jointly compute a function over their inputs while keeping those inputs private. Unlike traditional cryptographic tasks, where cryptography assures security and integrity of communication or storage and the adversary is outside the system of participants (an eavesdropper on the sender and receiver), the cryptography in this model protects participants’ privacy from each other.

There are numerous strategies out there that are used to keep private keys safe. Some experts recommend that crypto wallet users write down their private keys on a piece of paper and store it in a secure location such as a safety deposit box.

However, many users are apt to keep their private keys in obvious and insecure locations such as in their phones or computers. It is worth noting that devices that are connected to the internet are less than ideal because hackers can use malware, and phishing techniques to access the files.

Cold storage or air gapping is the other alternative but it also has its own drawbacks. Brute-force systems can easily bypass such strategies.

Cold storage also requires that a user be physically present to access the device. This can be a major inconvenience, especially when a user is looking to trade funds right away. Such pitfalls give keyless crypto solutions a definite advantage.

Curv, for example, has come up with a solution that relies on multi-party computation (MPC) technology. The service allows institutional enterprises to manage funds by setting up keyless private access parameters. The technology drastically lowers the risks of theft because there are no keys involved in the first place.

The company additionally offers insurance cover for held assets. Clients get up to $50 million in coverage.

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Samuel Gush

Samuel Gush is a Technology, Entertainment, and Political News writer at Communal News.

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