Test Out a Robotic Hardware Approach to Improve Private Key Custody Service for…

It was during 2019/2020, when the crypto space was fixated on the trading opportunities presented by the then all-time high interest in coins/tokens, that some turned their focus to the security of their own private keys. Considering the risk of cyber threat theft in software-based solutions, ideas for a physical security network began to circulate. The concept of a robotic hand that could plug and unplug a USB storing a set of private keys into the physical network, was seen as a secure and safe option, though its cumbersomeness and mechanical nature meant it never gained much traction. This experiment seeks to investigate whether there is a possible substitute to the traditional custody of digital assets, combining hardware and software. The challenge of safeguarding digital assets lies in the fact that the only way to gain access to them is through a single, private key. This necessitates the need to make sure that the key is highly protected from any malicious users, as well as people who have legitimate credentials for accessing it. At present, most solutions on the market store the private key either in a hot wallet (software) or cold wallet (a physical device not connected to a network). In either case, the investor would need to disclose the private key to a custodian in order to obtain effective custodial services. This FinTech is looking to shift the standard for hot/cold wallet solutions and the presumption that a custodian must be given the private key. To accomplish this, it has set out two conditions it maintains any digital asset custody system must fulfill. The FinTech's proposition suggests 3 components. The FinTech believed their proposed solution was better than existing traditional solutions in the following ways. Apart from these considerations, FinTech feels that their solution is straightforward for most people to understand. An analogy would be like having a device which holds the private keys securely in a data center, and which is shut off and disconnected from the network unless required for the issuance of the private key. This considerably decreases the risk of a cyber attack. If successful, the experiment can provide an alternate answer to the traditional hot/cold wallet approach. The former poses a threat to the security of the private key, while the latter adds an operational burden. Furthermore, it disputes the notion that an asset custodian must be aware of the private key to fulfill their duties. All of these can contribute to greater advancement in digital asset creation, aiding its trajectory to become more widely accepted by institutions and the general public.

Source: https://medium.com/@notherArmchairEconomist/experiment-with-a-robotic-hardware-solution-to-provide-better-private-key-custody-service-for-6199c9e81fd8?source=rss------fintech-5