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'Cold wallets' emerging as storage for virtual money

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Seen is a
Seen is a "Key Wallet," a USB-based cryptocurrency hardware wallet produced by local IT security firm Keypair. / Courtesy of Keypair

By Jun Ji-hye

IT developers have been increasingly releasing "cold wallet" systems as part of measures to ensure safe virtual currency transactions free from cyberattack.

Cold wallets refer to hardware devices that look like USB storage drives or cards.

The developers said such devices keep virtual money separate from PCs or mobile phones. This would make cryptocurrency transactions safer from cyber threats as the devices, equipped with individual crypto-chips, are separated from the internet when not in use.

The concept of cold wallets is compared to that of hot wallets that create and store data online.

Concerns about online threats escalated at the end of last year when local cryptocurrency exchange YouBit was attacked. Hackers stole about 17 percent of YouBit's cryptocurrencies in the attack, the exchange said in a statement at the time.

IT security firm Keypair has released the Key Wallet equipped with the firm's exclusive algorithm.

Keypair CEO Kevin Lee said there are three kinds of products.

"One is a USB type and another is an on-the-go type employing fingerprint verification technology," he said. "The other is a card type that can be connected to mobile phones via near field communications (NFC)."

On March 13, Penta Security announced a new line of cryptocurrency hardware wallets that enhance security features, noting closed beta testing is due to finish in June.

The company said it is seeking to differentiate itself by focusing on resolving vulnerabilities in the current cryptocurrency environment, noting its products are available in two types _ a card type and a device type.

"There will be several variations of the device in order to meet the differing demands of users," the firm said. "It will be capable of carrying out the entire cryptocurrency process from key generation to transaction."

The card type will feature advanced secure key storage and offer multiple authentication features such as a one-time-password (OTP) to act as a two-factor authentication (2FA) device, the firm added.

For its part, SCTECHONE, a subsidiary of KSign, has developed the "Touch x Wallet Card" cryptocurrency hardware wallet based on biometrics. The product is scheduled to be released within the first half of the year.

The system supports fingerprint authentication and allows users to check cryptocurrency information easily through an LCD on the wallet card, the firm said.

The company added the smartcard type is handy and portable.

Ledger, a French company known for its hardware wallet "Nano S," is also set to make a foray into the Korean market, planning to officially release its product here on March 27.

Nano S supports transactions in about 20 kinds of cryptocurrencies including bitcoin and Ethereum.


Jun Ji-hye jjh@koreatimes.co.kr


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