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Coinbase Exchange introduced iCloud and Google Drive services for the Wallet users to safely store and retrieve their private keys enabling them to avoid losing their funds when they lose their devices.
The major cryptocurrency exchange, Coinbase, has developed a new feature for its stand-alone digital asset wallet. According to an official announcement on February 12, users of this platform can now back up their private keys on Google Drive or iCloud. As per that statement, the new feature enables users to safeguard funds even after misplacing their private keys or devices.
The idea offers users of the Coinbase Wallet a safety net ensuring that their tokens are always safe. However, critics highlight that using cloud storage services may expose the funds to other threats like hackers. The announcement explained that:
“The private keys generated and stored on your mobile device are the only way to access your assets on the blockchain. Owners of ‘user-controlled wallets’ like Coinbase Wallet on occasion lose their devices or fail to back up their 12-word recovery phrase in a safe place, thus losing their funds forever.”
The development now lets the Coinbase Wallet store an encrypted copy of the recovery phrase on their cloud accounts. The crypto exchange also stated that neither they nor the cloud services company can access user funds. The recovery phrase key is unlocked using a password known only by the user. The backup is allegedly encrypted with AES-256-GCM encryption accessible using the Wallet mobile app only.
The latest version of the wallet supports cloud backup. Also, Android users can keep their private keys in Google Drive while iOS users can back up their data in iCloud. The Coinbase blog post added that:
“We intend to add support for other cloud services in the future”
Users must opt-in to the feature to activate it since cloud backup is optional. Users can manually review and back up their recovery phrase as before. It is advisable to also back up the passphrase manually after activating the cloud backup service. To enhance security, Coinbase suggests enabling two-factor authentication on all cloud accounts.
The Crypto exchange has added various features to place it among the top movers in the industry. As we said, Coinbase added support for Bitcoin pushing it closer to closer to creating the world’s leading user-custodied crypto-wallet.
In January, the exchange added resources for users in the US to claim crypto trades on their taxes. Coinbase and wallet service incorporated an educational guide on crypto and taxes and it integrated with popular tax software TurboTax. On the other hand, the customers from EU and EFTA benefited too. As we published last week, these users were provided with an opportunity to withdrawal fiat currency to PayPal.
How It Works
Users are required to update their Coinbase Wallet app to get the latest version that enables them to activate cloud backup. When the latest version of the app launches, a pop-up appears explaining Google Drive or iCloud backup. Customers can tap the “Back up now” to back up their private keys immediately.
It is possible to adjust private key management and backup settings from the Wallet settings menu whenever necessary. The Coinbase Wallet will regularly send a pop-up telling the user to back up their private keys to the cloud.