With millions of dollars flowing into the bitcoin economy by early-adopting mainstream investors, it’s no accident that major players like Coinbase are showcasing new security tools. One of the biggest concerns for major investors is the security of their funds, which are generally not protected by any form of regulation or insurance. Although bitcoin’s private addresses inherently more secure against direct attack than almost any banking system, systems like Coinbase are still vulnerable to the same attacks as any other web-based service. Providing a more secure “vault” option could go a long way towards easing the nerves of those who are considering huge deposits in a still-experimental system.
In typical user-friendly Coinbase style, the program was presented in terms anyone familiar with traditional banking could easily follow:
A wallet makes sense for day-to-day spending. Think about it like the cash that you carry in your pocket: It is very convenient for daily spending, but you wouldn’t take your life savings with you everywhere you went. … The vault, on the other hand, can be treated like a savings account. Withdrawals are infrequent and have additional verification steps making them slower, with increased security.”
Coinbase is rolling out the Vault option to users slowly, with only 5% of accounts having it available today. The company estimates that it will be enabled on all accounts by July 16. “Multi-sig” options for additional security are also in the works.
Coinbase is hardly the first company to present a “vault” style security system for bitcoin accounts. Earlier this year, bitcoin startup Xapo grabbed headlines when it announced user funds could be stored in hardware housed in actual vaults buried underground.