Coinbase Wallet, a popular cryptocurrency storage app, received a new feature that allows users to store the encrypted version of their private keys on Google Drive and iCloud.
The cryptocurrency exchange Coinbase announced this on Feb. 12.
Using personal cloud storage accounts enables users to recover their funds should they be unfortunate enough to lose their devices or misplace their private keys.
Peace of Mind While Exploring the Financial World
Coinbase, one of the most innovative exchanges in the crypto landscape, says that since the launch of its storage app formerly known as Toshi, the exchange has allowed its customers to experience “the full power of an open financial system.”
The exchange’s clients have complete control of their funds as they can access them from anywhere in the world.
However, the exchange warns that such freedom to have complete access to the open financial system comes with great responsibility.
The wallet generates private keys and stores on the users’ mobile devices. This is the only way by which the users can access their funds on the immutable blockchain.
Owners of these so-called “user-generated wallets” like Coinbase Wallet can lose their mobile devices or recovery phrase, making it impossible for them to claim their digital holdings.
Many people, both investors, and hobbyists have lost their digital wealth by losing their devices or by failing to keep their recovery phrase in a safe place.
Coinbase’s new feature promises to be a game changer.
“Now, with cloud backup, we give you the ability to store an encrypted copy of your recovery phrase on your personal cloud account,” writes Coinbase’s Siddharth Coelho-Prabhu on the company’s blog.
With this helpful feature, owners can regain access to their accounts using their passwords and personal cloud storage accounts.
AES-256-GCM encryption is used to encrypt the backup, which can only be accessed by Coinbase’s storage app.
The user’s password is the only way of decrypting the encrypted recovery phrase.
Activating and Using the Cloud Backup
The cloud backup feature is currently only limited to devices that support Google Drive on Android and iCloud on iOS.
The exchange has promised to roll the feature to other cloud services in the future, although no time frame has been given yet.
The cloud backup is offered as a convenience, and therefore, account owners are urged to manually backup their recovery phrase after using the new feature.
At the same time, users of the new feature are reminded that security is very important and they have to activate Two-Factor Authentication on their personal cloud storage accounts.
The aim of this is to make it harder for hackers or attackers to gain access to those accounts and have the recovery phrases at their disposal.
There are many ways of activating the cloud backup feature. Users who back up their Coinbase Wallet app receive notifications to use the cloud to back up their private keys.
Users can also access the new feature in the Settings menu of the storage app. The exchange will also send regular notifications to users encouraging them to back up their private keys.
The Coinbase Wallet app is a “user-controlled” wallet for storing digital assets, whereas, with Coinbase.com, Coinbase stores the users’ digital assets and the private keys for them.