Statistics show that the vast majority of owners of virtual coins prefer to keep their funds on exchanges and online wallets. Convenience wins the reliability of cold storage, but can these properties be combined?

Why do not like local storage

The size of the Bitcoin blockchain in 2019 tends to reach 300 GB, although this does not pose a problem for setting up a local wallet. The catch is that most users do not know how to synchronize the blockchain without downloading the full database. As a result, prolonged synchronization frustrates newcomers and forces them to abort the installation.

It is worth taking into account that modern trends are forcing 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 is the lack of knowledge about the correct backup procedure, which is why there is a fear of losing funds due to a computer crash. In total, it turns out that in some cases it is safer to shift the responsibility of storing cryptocurrencies to third-party services, one of which is a cloud crypto wallet.

Hot cloud

Public crypto moguls sometimes come to the conclusion that it is better to keep your funds away from you. And what could be further than a virtual cloud? In addition to pretending to be millionaires, the cloud system can be useful for teams of traders, as it solves 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 to store digital data becomes reliable without loss of convenience. To combine the two properties, programmers decided to put a whole local wallet in the cloud.

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

  • Encryption of the communication channel.
  • Each user is allocated a separate operating system.
  • Low-density cloud computing on a single host.
  • Random host selection using the Russian roulette method.
  • LVM volumes are encrypted.

The choice of host is implemented using the Russian roulette method. The process of working with a cloud cryptocurrency wallet is no different from the local one. As a result, the service combines the advantages of hardware and an online wallet:

  • Full control.
  • Confidentiality.
  • Security.
  • Easy setup.
  • Fast start.
  • Remote access.
  • Physical protection.

The main disadvantage is the price – from 1,500 to 3,000 rubles per month.

Trust in the administration

The administration of the service does not have access to logins and passwords of clients who themselves configure all the necessary keys. Administrator rights also belong to clients, so all access data is owned by users. Assuming that one of the hosts decides to use the user’s wallet, he still will not get access to management. An obstacle in its path will be the encrypted data of LVM volumes.

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

Criticism

Hacking any OS is just a matter of time and money because of the zero-day threat (a vulnerability from which opposition has not yet been invented).

A crypto millionaire who has revealed his fortune will surely turn out to be the goal of targeted theft of funds, and storing bitcoins in the cloud is most likely to be successful. The main vulnerability of the cloud is that hackers constantly have remote access to it and can try different hacking options. Because of this factor, the cloud loses even to a regular 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 crypto exchanges, which are subjected to successful attacks constantly.

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

Conclusion

A cryptocurrency cloud wallet is a new tool that has combined the convenience of working with cryptocurrencies but has not yet proven its reliability. Reviews about these services are not enough.

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