On Friday, Shinhan Bank – the oldest bank in South Korea and the second largest – announced plans to develop a service which will improve security for Bitcoin holders, according to Korean media outlet Naver.
An unnamed Shinhan official said: “It is a service that keeps the blockchain key through the virtual safe provided by the bank. We are looking for ways to provide a free service when depositing and charge a fee when withdrawing.”
Said key is the means by which a Bitcoin wallet is accessed. Keys consist of 26-35 alphanumeric characters and they are usually stored on an online wallet app. Cryptocurrency transactions are not overseen or verified by banks, which is a major selling point of the digital currency. However this independence means that if a phone or key is lost or compromised, the customer will not be able to access his wallet, and his currency will be lost forever.
Kim Dong-Jin of the Financial Supervisory Service said: “When a key stored in a terminal is stolen by an attacker, assets and confidential transactions protected by the key can be leaked…you may not be able to transfer assets and even if your key is abused, you cannot verify it.”
An online safe offered by a bank, in which customers register in order to store their keys, would certainly solve that particular problem.
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This interest in cryptocurrency security seems to have been inspired by the attack on Bithumb in June, in which the data of 30,000 users was compromised. Bithumb is South Korea’s largest cryptocurrency trading venue.
Digital currency has its pros and cons. The independent nature of the system is one positive, and the aforementioned security problems a negative. As banks begin to take interest in the cryptocurrency world, users may find themselves wondering where trading this particular pro with this particular con will leave them.
1. Shinhan Bank (approx. 2nd-3rd largest bank) in Korea is in test phase to build cryptocurrency vault/wallet services amid of recent Bithumb exchange hacks in June which leaked 30,000 users details as well as server crash in November. Source: https://t.co/ek23HyE7sF pic.twitter.com/gRB1mFrGPs
— Crypto Korean 한국 (@CryptoKorean) November 24, 2017