As the popularity of crypto assets shoot up, more and more coins are on the rise. With at least 1,500 alternative coins to Bitcoin (1,921 according to coinmarketcap.com as of Sep. 7th, 2018), there arises a question: how are we going to store them safely? The answer is simple: in a digital wallet.

While there are many digital wallets out there, it has never been more important that the ones available should be as secure as possible – think of a digital Fort Knox in your hand. This cannot be emphasized enough, since even a highly-popular hardware wallet has its flaws and could be hacked. And this is why software and security experts all around the world are doing their part in the quest of having the most secure digital wallet features around. Below are some of their results:

Data Encryption

Let’s start from the oldest, most traditional security feature, yet it’s the one that remains popular and reliable: data encryption. Encryption itself has existed for a long time, with one of the first encryption attempts believed to be from 1900 BC. With encryption, data is encoded or replaced with a set of unique characters, so that it can only be accessed or read by the person authorized to do so.

Fast forward for about four millennia, IBM became the first computer giant who picked up the need of their customers, which was to make sure their personal data stored in their personal computers stayed safe. IBM designed their own encryption system named cypher, with the DTD version used for electronic banking in the commercial world.

Since showing their first sign of emergence in the late 1990s (with the arrival of PayPal), digital wallets have been using data encryption ever since, and innovators keep improving and innovating the most up-to-date encryption methods for them to use.

While data encryption makes sure that your data isn’t easily readable by anyone, it doesn’t mean it’s without its flaws. Every time you are about to transfer your assets (in the form of data) to another party, it means at the same time you’re allowing a third party to possibly intercept this data transfer. At least it’s a good thing that encryption is still used today, which means it will hopefully continue improving.

Biometrics

Since data encryption still has its drawbacks, a new form of technology has come, and in time will likely get implemented into more digital wallets: biometrics.

The word “biometrics” itself is derived from the Greek words, “bio” (life), and “metrics” (to measure), so it can be roughly translated as “measuring life”. By “life” in this instance, it means this technology focuses on what makes every living being unique physically. In this case, it aims to recognize things of a human’s body that are unique to himself/herself, like fingerprints, face, and/or retina.

Although the history of people stamping things with their hands is quite long, the first known biometric technology implementation occurred in 1896, when Sir Edward Henry, an Inspector General of the Bengal Police, worked together with Sir Francis Galton to use fingerprints as a method to identify criminals.

Biometrics would then continue to develop as it widened its scope not only in fingerprinting, but also to the point where it is now – able to recognize faces, facial expressions, irises, palms, and more (even how you walk or look from above!). In the case of a digital wallet, biometrics helps make sure that the only person who can access the wallet is the owner (not flawless, but it does make hacking or accessing your wallet much more difficult for anyone who isn’t you).

Since the bodily features used in biometrics are unique to each individual, biometrics arguably provides more security. However, depending on the system itself, some biometrics can be easier to fool than others. This means, again, depending on the quality, biometrics alone is not 100% secure.

NFC

Near-Field Communication, better known as NFC, first made its appearance in mobile devices in a Nokia phone in 2006.

With NFC, users can transfer their digital assets in a safer way, since for these transfers to take place, they would need to stay close to pay points provided by their favorite merchants. If a digital wallet uses this technology without being connected to the Internet, users can easily control and oversee the transfers of their money.

NFC still provides some risks for its users though, one of the most notable being mobile malware. If a digital wallet user downloads something to their device and accidentally installs a malware, it could sniff the sensitive data being stored, such as credit card numbers.

NFC does provide another security layer on top of data encryption, acting as a complimentary security and convenience feature that will make hackers’ work become harder. This way, users of digital wallets are exposed to less risk.

It is worth noting that thieves can still swipe information from NFC devices with the right equipment, so it’s best to get some sort of signal-blocking pouch for your phone and/or card.

Conclusion

While there have been advances and innovations in mobile wallet technologies, they clearly could still use some improvements. We remain hopeful and confident though that the future of mobile wallets will continue, and that developers will continue to provide innovations to make digital wallets safer and more secure in the future.

And we live what we talk: in support of the digital ecosystem, we are implementing all of the features above in our advanced & secure digital wallet, Blockchains.my (BCMY). By taking the strengths of each security feature and combining them together, plus some other innovations unique to our wallet, we are hoping to make sure that your digital assets stay safe. To learn more about our wallet, you can visit our website.