How Trezor Wallet Can Reliably Protect Your Data

Do you own a digital wallet? If yes, which security protocol does it use to protect your account? Sending a one-time password via sms makes your wallet susceptible to hack attacks. Hackers have found new ways to intercept such texts and also pose as phone owners thus defrauding coin holders. You can’t afford to take that chance! Keep reading to find out available types of digital wallet security protocols, the safest one to use and why Trezor Wallet is ideal to store your data.

Digital Wallet Security Protocols…

Owning a digital wallet requires you to adequately protect your funds from unauthorized third-party access. In the past, websites offered passwords as a way to protect users’ accounts. These proved to be quite unreliable as they are susceptible to attacks. Also, since most people use the same password for multiple sites, if one site is compromised the others are likely to suffer the same. Due to these and many other reasons, websites switched to additional user account protection with two-factor Authentication (2FA).

There are two types of 2FA:

1. Time-based One Type Password (TOTP)
2. Universal second factor (U2F)

Time-Based One Type Password

Also known as Google authenticator, it is used for two-step verification based on a time-based one-time password. You must have already come across it as it is the most utilized account protection technique.

When you first sign up to an account, most websites generate a one-time code and send it to you via either SMS or mail. You are then required to enter this code into the special field on the sign-up page within a specified time. Once done, you can complete the sign-up process to access the account. If you happen to log in from a new device, you will again be required to enter a one-time password, along with your username and password.

This method became so popular for the following reasons:

1. It is able to generate a code every 60 seconds. Moreover, any code you receive via sms does not last for more than 30 minutes making it harder for hackers to steal the codes from you.
2. You do not necessarily need an internet connection to use it.
3. Google Authenticator allows you to create multiple accounts on the same website using the same mobile number.
4. It is usable with non-google websites such as WordPress, Evernote, Facebook, and Outlook among others.
5. It is fast and easy to use.

Though TOTP was meant to remedy the disadvantages brought about by the old password model; however, it does not successfully accomplish that. The technology comes with its own weaknesses and inconveniences including:

1. Cumbersome Back-up Codes

You are required to take additional steps to backup your secret password. In case it is lost, you will be required to start the process all over again. This can be quite hectic.

2. Insecure Storage

Once you generate your secret, only you and the service provider will know it. Which means you have to trust them to keep it safe for you, but can you really? Besides, if the service provider’s website is hacked, your information shall also be vulnerable. In the past we’ve had so many companies— including giant ones such as Facebook—suffer hack attacks, thus no company can be said to be 100 percent safe.

3. Insecure Online Communication

Generated backup codes are sent to you online which makes them vulnerable to interception by hackers. Moreover, they are sent in plain text or a QR code rather than a hash. That’s quite insecure.

After recognizing the disadvantages of TOTP, Google in collaboration with Yubico came up with another way to protect users accounts.

Universal Second Factor (U2F)

It uses public-key cryptography to authenticate your identity. In this case, no one else is aware of your private key apart from yourself.

How is this possible?

U2F strengthens two-factor authentication via specialized USB or NFC devices which are made with an almost similar technology found in smart cards. To verify your identity, you are required to insert the Universal Serial Bus (USB) token into any port. You can then press the U2F token tab and enter a preferred username and Pin. Once done, you can use that device to access multiple online services without the need for special device drivers or client software. As long as you have a key token device and a browser that supports U2F, you are good to go. Browsers such as Opera, Chrome, and Firefox currently support it.

The device uses encryption, which is basically a private key that corresponds to your public key. This enables you to unlock your accounts on various websites including Facebook, Google, WordPress, etc. You can rest assured that unauthorized third parties cannot access any of your passwords since they are encrypted.

Advantages

1. Privacy is guaranteedas you are the only one who holds the login information to your accounts. You also have the option to choose multiple identities or keep your identity.
2. One-time login. Once you have entered your login information you will never be required to do that again.
3. Confidential databases are not stored by the provider thus making it difficult for hackers to access them.
4. Secure and reliable recovery as users are able to register with two U2F devices with every provider. If one of them is lost, the other can come in handy.
5. It is easy to use as U2F does not require you to enter codes or install drivers. What’s more, a single token is able to access many sites which is ideal for anyone who finds it difficult to remember passwords.
6. It is flexible as it can work well with a variety of authentication modalities including keychain and computing devices.

Due to U2F’s additional security measures, it is considered the perfect security protocol to protect a digital wallet. Trezor wallet incorporates U2F into its technology thus adequately securing your account.

About Trezor Wallet

Introduced to the market in August 2014, it is a bitcoin hardware wallet which provides secure cold storage plus the ability to spend via a hot wallet.

How Does U2F with Trezor Work?

The technology holds private and confidential keys on a physical device rather than on mobile, desktop, or the internet.

To use the digital wallet, you are first required to sign up with Trezor and provide a username and password. You will then be required to confirm the log-in by clicking on your Trezor device. Trezor assigns each of its users a 12 or 24-word unique recovery seed which is used to back up their accounts. It is generated offline using RNG found in the device and displayed on Trezor’s screen. You are then allowed to add a passphrase (any word of your choice) for extra security.

Additionally, you will also need to set your device’s name and preferred private Pin which only you will know. Anytime you want to access your wallet you will be asked to enter it. In case a third party tries to guess your private key, it will prove to be an impossible task because every time they fail, the waiting time in between the attempts will be doubled. Making 10 incorrect guesses would probably take months!

Inside the device, your secret key is kept safe from hackers and viruses.

Other benefits include:

1. It supports a Variety of Cryptocurrencies

Trezor provides enough room to store a variety of cryptocurrency coins. It accepts all Ethereum-based (ERC-20) tokens. Please make sure that the type of coin you want to store in the wallet is acceptable. If not, you may end up losing it forever.

2. Large Storage Capacity

Unlike some wallets which dictate the number of coins or apps they can hold, there is no limit to the number of coins that Trezor can store at any given time.

3. Convenient Backup

In case your Trezor wallet is stolen or misplaced, a backup is available. This is provided during the sign-up stage where you receive a backup passphrase and/or recovery seeds that MUST be written down and kept. After purchasing Trezor, check the package for a small numbered paper. Use it to jot down your recovery seeds and store them safe. In the future, if your device goes missing, you can enter the passphrase into another device so you can access your funds. Other wallets such as Electrum or Mycelium can also help recover your account.

Please note that if you lose your recovery seeds or passphrase it will not be possible to recover your wallet.

4. Phishing Protection

While using Trezor, you can expect regular pop-ups asking you to ascertain whether the sites you are about to visit and what you are about to authorize are intentional. It also displays the URL of a website you are logging into. Additionally, it uses physical buttons (Trezor One) or HD screen (Trezor Model T) which require you to press them and confirm any ongoing transaction. These measures ensure unauthorized persons cannot automatically send transactions from your device.

5. Extra Functionality

Apart from storing cryptocurrency coins, Trezor can also be used as a U2F token enabling you to access your favorite sites and securely store login information. The Trezor device is able to encrypt and decrypt passwords stored in its password manager.

6. Convenience

You can buy or exchange your coins against other cryptocurrencies or fiat currency within Trezor’s digital wallet without leaving your private keys on a third-party exchange. You only need to plug in your Trezor device, open the program and click on the buy/exchange tabs.

7. Compatibility with Software Wallets

Trezor is compatible with software digital wallets including Electrum, MultiBit HD, Mycelium on Android, GreenAdress on desktop, etc.

8. Safe from Virus Attacks

Trezor's architecture is highly secure thus protecting the device and your data from malware attacks. Surprisingly, you can use Trezor on a malware-infected computer and nothing bad will happen to it.

9. Complete Transparency

The technology is built deterministically, with an open-source code thus allowing any developer in the world to audit its code and ascertain it is genuine.

Conclusion

Many users lose crypto currency tokens under hack attacks every day. It seems like hackers keep finding new smarter ways to steal. Good news: storage options such Trezor prove to be smarter. From its introduction to date Trezor remains to be one of the safest hardware wallets to store your digital coins. Even though it comes with a high price tag, it is definitely worth it considering the quality of services provided. You only need to make sure that you purchase an original product as there are numeours fakes circulating the market. Trezor company has provided users with an effective way to tell an original from a fake.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.