HyprKey, a fraud prevention company, introduced the HYPR-3 three-factor authentication protocol to increase the bitcoin transaction security and protect users from cyberfraud.
HyprKey creates an authentication bridge between the user and the mobile wallet and converts digital currency in real time. This enables users to authenticate transactions at the point of sale without linking their debit cards.
“The reason that [cyberfraud] struck me as the main problem is bitcoin is inherently an irreversible system of payment,” said the firm’s CEO George Avetisov.
“The problem with fraud is we can’t use reversible digital payment systems like debit cards and credit cards and the current banking system that we have, which is reversible, to transact with irreversible digital currency,” he added.
The HYPR-3 is a sticker that is placed on the back of the user’s phone and connects with it through Bluetooth. When the user swipes the finger on the device, it reads the fingerprint and and authorizes the transaction. It is a third step in security, after PIN codes and the sticker itself.
“Three-factor authentication basically renders your wallet unhackable,” Avetisov said. “You would need to have me physically authenticate this transaction for it to go through.”
HyprKey will be rather a protocol, not an app. “We’re missing a device,” he said. “That device is off-device authentication.”
Bojan Simic, HyprKey’s CTO, said the HYPR-3 token secures real-time bitcoin conversions and eliminates fraud from the equation. “By eliminating fraud we can basically eliminate interchange fees as well and determine that the person making the purchase is 100% that person,” he said.
Avetisov suggested that the complexity associated with adding one more step to the payment process could provoke problems with using the authentication schemes, as everyday users are focused on usability.
He said: “If we could solve the issue of authentication then we could let them use it in real time without ever actually knowing what it is, or touching it, or understanding it, or being exposed to its volatility or risks or security problems.”
HyprKey team admits the new biometric sticker is the easiest deployment method as it separates the authentication process from the operating system of the user.
Avetisov said: “We’ve done it in a way that doesn’t make you feel like you’re wearing or having to walk around with another thing.”
“All the contents of our wallet are going to be in the phone, in the tablet, soon enough. This is an archaic thing, the wallet. It’s going to be completely digital in the next couple years,” he also stated.
HyprKey intends to make 25,000 units in May.The transaction fees will total up to 0.03%.