{"id":21473,"date":"2018-06-05T21:08:41","date_gmt":"2018-06-05T15:38:41","guid":{"rendered":"https:\/\/ambcrypto.com\/?p=21473"},"modified":"2024-01-09T18:10:52","modified_gmt":"2024-01-09T12:40:52","slug":"decoin-project-use-cold-storage-focus-is-on-cryptocurrency-security","status":"publish","type":"post","link":"https:\/\/ambcrypto.com\/decoin-project-use-cold-storage-focus-is-on-cryptocurrency-security\/","title":{"rendered":"Decoin Project use Cold Storage – Focus is on Cryptocurrency Security"},"content":{"rendered":"

We\u2019ve all heard it before: <\/span>\u201cDon\u2019t store your cryptocurrencies on exchanges. If you don\u2019t have your private keys, then you don\u2019t really have your crypto.\u201d <\/span><\/i>But what about when large projects don\u2019t do all they can to ensure the protection of crypto assets? <\/span>
\nSometimes there\u2019s a massive portion of the circulating supply floating around for trading that isn\u2019t properly secured. That\u2019s why companies like <\/span>Decoin<\/span> are keeping 97% of their currency stored in cold storage for investors while only the remaining 3% is in supply for trading. <\/span>
\nOn top of that, the company is introducing credit cards for cryptocurrency usage and a revenue-sharing model where coin <\/span>holders will receive 6.2% back annually<\/span><\/a> for staking within their POS algorithm as well as sharing revenues of the trading platform and exchange fees which is the project build at Decoin. <\/span>
\nAll of these added benefits from companies are to bring consumers over to the side of the crypto market that cares about asset security. But why is that important? Let\u2019s take a look at exchanges and their latest security rankings to see why that\u2019s so crucial<\/span>
\nAfter the recent release of a 2018 \u201cCryptocurrency Exchange Password Power Rankings\u201d report by Dashlane, the current state of cryptocurrency exchanges is clearly still not what it could be. <\/span>
\nAccording to the report, 71% of the exchanges tested failed to achieve a 5\/5 passing score. Even though many exchanges have added security measures now like 2 factor authentication [2FA], they still come in short when compared to platforms in the traditional financial market. This can leave large amounts of funds vulnerable when not in use.<\/span>
\nAn Industry-Wide Problem<\/b>
\nThe main issue with storing cryptocurrencies online either in an exchange account or in an online, \u2018hot\u2019 wallet is that it forces users to hand over trust to another party. But is it a good idea to hand over that trust if that part isn\u2019t doing all it can to protect your funds? <\/span>
\nProjects like Noble Bitcoin and <\/span>Decoin<\/span> don\u2019t think so (and neither should the community). If another party is storing assets for you as an investor, most would feel at ease knowing that their funds aren\u2019t easy targets online. Additionally, when storing assets on an exchange, there are many others doing the same thing. This becomes an issue because large pools of crypto assets (like a centralized exchange or online wallet service) create even larger targets on their backs than individual wallets. <\/span>
\nThink about it: If a bad actor were to put in the work to compromise a system, would they prefer the payout of a small personal wallet, or of a portion of an exchange\u2019s assets? The answer is obvious. The crypto community has already gone through this tough reality following the events at Mt. Gox and Coincheck. <\/span>
\nUpcoming Alternative Options<\/b>
\nA better option for investors, traders, and companies alike is the use of \u2018cold\u2019 storage, rather than \u2018hot.\u2019 Decoin has been focusing on this in their currency distribution and storage model. Cold storage simply refers to a wallet storing crypto assets that are neither online nor connected to the internet in any way (your wallet downloaded on your PC still counts as a \u2018hot\u2019 wallet). <\/span>
\nThough enthusiasts can make their own version of a cold wallet with a little bit of time and know-how, the most common cold wallets are hardware wallets and paper wallets for storage. Cold wallets are generally used for longer-term holding periods and for those dealing with large amounts of cryptocurrencies. <\/span>
\nBecause they\u2019re so well suited for large amounts of assets, cold storage is being utilized by companies and cryptocurrency projects that take security seriously. As an added measure for asset security and risk mitigation, projects like <\/span>Decoin are taking advantage of cold storage in how they operate<\/span><\/a>, keeping 97% of customers\u2019 funds in cold storage and fully insures the remaining 3% being actively traded in the markets. <\/span>
\nSince the current status of the security on many of the large cryptocurrency exchanges isn\u2019t as rock solid as it could be, it\u2019s evident that cold storage is still the best option. Whether investors are looking to handle cold storage on their own via a hardware or paper wallet, or if they\u2019re planning on operating with businesses that keep funds in cold storage to avoid another Mt. Gox, cold wallets are a necessity. <\/span>
\nMore information on the ICO and the company itself, including <\/span>whitepapers<\/span> and vision, can be found here<\/a>!<\/span>
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