Cold Wallet Vaults: Shifting The Paradigm For Data Security

FinTech, Innovation, Investing, Opinion | July 20, 2018 By:

One of the greatest challenges facing businesses today is the security of data assets that are at rest or in motion around the world. Storing and securing critical data within data centers (whether physical or virtual) is top of mind from the boardroom to the remote data center operator. Consequently, organizations are investing substantially in cybersecurity strategies.

According to research firm Cybersecurity Ventures, cyber-attacks and data breaches in businesses almost doubled globally in 2017 compared to 2016 and spending on cybersecurity is predicted to exceed $1 trillion from 2017 to 2021. This level of spending reveals that businesses are willing to pay a premium to protect their organizations from the damage to brand equity and potential insolvency that a cyber-attack can cause.

No cybersecurity strategy can fully address this evolving threat, though. Companies today are using multi-tenant data centers, but in doing so, they run the risk of exposing high-value, highly sensitive data to bad actors, not to mention the challenges associated with jurisdictional hazards. Organizations of all sizes are subject to the vulnerability of the public internet and a global, disparate network infrastructure.

Blockchain-based cryptocurrency is no exception. Although blockchain technology itself is highly secure, hackers have already pulled off cryptocurrency heists that have left online vaults empty. As the world shifts to cloud services, it is becoming clear that the time is now for a paradigm shift in how to store and access sensitive data such as digital currency.

The Evolving Paradigm

To meet customer and market demands, cryptocurrency providers require an alternative, secure storage and transport solution. What if there was a way to bypass the terrestrial network infrastructure entirely to mitigate exposure and secure this data from theft while reducing costs both from an infrastructure and risk perspective?

Let’s explore some of the reasons for this paradigm shift:

Network Vulnerability – Today’s cloud services run across both public and private networks using cybersecurity solutions that are not robust enough to stay ahead of continuously evolving cybersecurity threats. Cryptocurrency is being targeted and stolen. Currently, this data can be subjected to government agency monitoring and exposed to acts of competitor sabotage through unauthorized access to computers, passwords and cloud storage on public and private networks.

Jurisdictional Risks – A government jurisdiction could restrict or force the exposure of company information, especially when it has regularly been replicated or backed up to an undesirable jurisdiction at a cloud service provider’s data center. This has created the requirement for companies to operate separate data centers in each jurisdiction – financially prohibitive for many small and medium-sized businesses.

A New Way of Thinking About Currency Storage and Protection

The development of a space-based global network could provide cryptocurrency asset owners and exchange companies with an independent cloud infrastructure platform, entirely isolating and protecting sensitive data from the vulnerable global terrestrial network infrastructure. Blockchain technology already provides an immutable record of transactions, and storing that transaction data in space would provide an additional layer of impenetrable security. Since this data never traverses the terrestrial network infrastructure, an ultimate “air gap security” or “Space Gap” would be created to offer unprecedented data security.

Data can be stored in data vaults designed to enable secure “cloud” storage without any exposure to terrestrial networks. This would result in the ultimate cold wallet vault. Its architecture would provide a truly revolutionary way of reliably and redundantly storing data, greatly mitigating the risk of cyberattack and jurisdictional exposures.

Costs for such a solution would run the same or less to build, operate and maintain as terrestrial networks and would serve as a key market differentiator for companies that are looking for solutions that provide physical protection of their currency and that of their customers. This is because such a system would need to include its own terrestrial network infrastructure to be entirely secure. While this is extremely expensive to accomplish on the ground, it need not be the case if properly architected as a space-based storage platform and network.

In the near future, multinational enterprises, governments and embassies will turn to satellites for the centralized storage and distribution of sensitive or classified data and the distribution, storage and protection of video and audio feeds from authorized personnel in remote locations. It only makes sense that cryptocurrency companies would do the same for their digital currency assets.

The Time is Now

As the number of data breaches continues to soar and online cryptocurrency vaults remain vulnerable, organizations that rely on terrestrial infrastructure and cloud storage services are looking for solutions that replace traditional terrestrial infrastructure with solutions that isolate and protect critical, sensitive, high-value data. Now is the time to make this new paradigm in cloud storage a reality.

About the author:

Cliff Beek is a leading global communications executive. He has extensive experience with the management and financing of equity-backed ventures within areas of satellite, mobile broadband, mobile app development and cloud infrastructure entities. Beek founded Star Asia Technologies and Laser Light Communications and served as the EVP at CoCo Communications. He holds an MBA from the Wharton School, University of Pennsylvania.