On October 17, GateChain testnet release meetup themed “2019 GateChain Building the Security Gate. io Guarding The Future” was held in Ho Chi Minh city, Vietnam.
In this meet-up, we organized a panel to let our guests share their thoughts about wallet safeness.
Participating Guest:
Marie
Park Michael
Nguyen Nhat Quang
Nguyen Thi Hoa
Host:Can you talk about your understandings of what safe wallet means?
Park Michael ：A secure wallet is a private key that is protected from all risks. It’s that simple. I mean all risks, including system failures, hardware failures, human errors of any kind, including malicious intent on the part of the person who has access to the private keys, and personal errors, such as the loss of a mobile phone that contains the private key.
Nguyen Nhat Quang: In my opinion, the safe wallet should be low risk or even no risk. Without authorizing someone else, only you can decide what to do with your wallet, and you don’t have to worry about losing your property or getting hacked.
Nguyen Thi Hoa: A secure wallet is a wallet that the owner of the wallet has complete control over. The owner holds the private key and gains exclusive access to the wallet without interference from third parties.
Host：Can DEX really solve the problem of stolen funds? What are the pros and cons of DEX compared with centralized exchanges?
Marie：The debate over Decentralized Exchanges vs. Centralized Exchanges has been one for the ages, but I find it to be one of the most misunderstood. Each has its own advantages and disadvantages, and we will discuss these in detail.
Decentralized exchanges provide users with the benefit of trading of truly owning their own currency. By using their own wallets, they are the sole owners of these funds. However, that is not to say that decentralized exchanges solve the problem of stolen funds. Hackers can (and do) still try and hack into private wallets. Furthermore, user error is still one of the most prevalent ways to lose money. Whether that be losing your password or your ledger usb key, you are still your own worse enemy when it comes to losing your bitcoin.
Decentralized exchanges have until recently typically had much slower matching algorithms than centralized exchanges, meaning that transactions are typically performed at a much slower pace. This isn’t a problem for HODLers, but any trader knows how important this can be.
[Quality] Centralized exchanges such as Gate.io can process up to 10,000 transactions per second. The advantages don’t stop there though; any additional trading functionalities such as margin trading, derivatives trading, interest or staking collection are currently available only on centralized exchanges.
These functionalities are only available due to the centralized nature of the exchange [for the time being], however many misinformed users automatically qualify centralized exchanges as deceitful. This couldn’t be any further from the truth.
Whilst there have been cases of exchanges stealing user funds, any trustworthy exchange encourages its users to store their crypto savings on a wallet and use their exchange only for trading purposes. Since exchanges do not make any money on funds that are not being traded, [untraded] user funds are in fact a liability for us.
At Gate.io, we have encouraged users since our inception in 2013 to store their funds on their own personal wallets. In fact, we even created Wallet.io to make this process all the more easier and automatic for our users. Just as any company that has been around for such a long time, we have been through our share of hacks, but it has been our policy to fully reimburse hacked funds when possible (and so far, it has always been possible).
Combining both decentralized and centralized exchanges provides users with the best of both worlds: privacy and functionality, and that’s what we’re striving for with the launch of our new DEX.
Park Michael ：DEX is basically a P2P marketplace, not a centralized hot wallet with cryptography assets and private keys. The advantage of this approach is that users are at least at risk of having their private keys stolen in the event of a breach or intrusion. While the trading volume and trading conditions of the exchange are limited to the current user pool, users themselves need to learn how to manage their private keys and wallets, which is the normal processing of centralized exchanges operated by the exchange.
Nguyen Nhat Quang:Technically, DEX can really solve the problem of digital currency loss. But user operation and time cost will increase greatly. Most users now prefer to use mobile apps, which allow them to make transactions anytime, anywhere, in addition to time flexibility. But for users who don’t know much, it’s easy to lose the private key. Once you lose your private key, you will lose all your assets in the DEX.
Nguyen Thi Hoa:I think DEX can partly solve the problem of stolen funds. When we control the private keys ourselves, we can proactively protect our funds. However, if you lose your private keys or forget your password, you can only blame on yourself.
HOST：At present, the biggest risk of DEX is the loss of private keys. Once a personal computer is damaged or hit by the spread of virus , the funds may never be recovered. It is said that GateChain is capable of retrieving private keys and revoking stolen funds. Can you share a little about how this is achieved with us?
Marie：Our incredible tech team has been working on this solution for the past 2 years, and I’m so proud to share it with you today.
On our new blockchain, GateChain, you will have access to 2 different accounts: a Standard Account and a Vault Account.
The Standard Account enables transactions to work just as they would on any other blockchain. Transactions are irreversible and distributed making them fully transparent and immutable.
The Vault Account however uses incredibly complex technology so as to reverse any unauthorized transactions. Any long-term holdings should be kept in this account so that you can retrieve funds if hackers steal them or recover them if you forget the password.
So as to avoid double spending issues, the taxid will clearly indicate whether the provenance of a transaction comes from a Vault Account or Standard Account.
Park Michael:In the case of a single-sign wallet, if the private key is lost, it means that your asset may not be retrieved ever again. In a multi-sign wallet, it is possible to use another key to create new keys when losing a key , or at least to retrieve your password assets in other ways.
Nguyen Nhat Quang:The multi-sign wallet is simple to understand: it’s like a cabinet with many key holes, and you need enough keys to open the cabinet. It actually provides the necessary security for an organization or a group of people, and can be paid for or stored in a digital currency wallet. Single-sign wallets are not the best choice for businesses or groups in digital currency transactions. For example, a business’s money is stored at a standard address with a matching private key. There are two dangers. First, if an individual owner loses his key, the enterprise will suffer a great loss. Second, if the same keys is in the hands of more than one person, the risk of being traded in a malicious way will be much higher. Multi-sign wallets provide a solution to both problems. Unlike single-signature wallets, funds are stored at multi-sign addresses and can only be transferred in the state of multiple signatures.
Nguyen Thi Hoa: the first step is to understand what a single-sign wallet is and what a multi-sign wallet is. Single-sign wallet means only one
Private key needed to unlock and transfer money wallet. Multi-sign wallet is container that requires multiple private keys to view the funds. It can be 2–2, 2–3, 3–4, or 4–6, etc. This means that a wallet requires two-thirds of the total private keys to access the funds . If only one private key is used, it is likely to result in losing funds. So for me, the advantages of multi-sign wallets are: 1. If you lose a private key, you have a better chance of getting it back. 2. Unlocking rights can be Shared among different participants, which enhances cross-security, especially among partners within the company.
Host：If the exchange allows you to manage your own private key, would you do so?
Marie:Absolutely! I have personally carefully stored away my cryptocurrency holdings on Wallet.io, and only have trading funds on my Gate.io account. Although the transition between the two is already extremely simple, the extra layer of security GateChain will provide is a huge benefit I’m looking forward to enjoying.
Park Michael:I think there is a higher chance of human error and the loss of private keys than having the exchange manage the keys.
Nguyen Nhat Quang: if the exchange allows usersto manage private keys, it means that users can transfer money at any time without waiting for approval, saving time for both parties.
Nguyen Thi Hoa:I’ll do it. But, just in case. We still have to keep the discipline to put all our funds in different wallets, or keep most of them in cold wallets to be safe. If you lose a private key, it will minimize the damage to your assets.
Host： Currently, GateChain is the first public blockchain with unique innovations focusing on digital assets security. It’s all about better solving the problem of private key loss and account hacking, and at the same time providing users with a transparent and secure trading environment. Can you see if this approach can pioneer the progression for blockchain industry to their respective products? Or will it give some enlightenment to peers for them to follow suit?
Marie：Gate.io has pioneered many new innovations and functionalities over the years, and I expect GateChain to be no different from that.
The industry has come a long way since its inception just 10 short years ago. We all agree that the finance industry is broken, but tech solutions cannot be the only answer if we hope to achieve mass adoption. Humans do not function as machines do, and so leaving room for user error is vital. If we do not leave this possibility, the world’s powers would simply shift from bureaucrats to technocrats. To me, blockchain technology enables individuals and businesses to achieve their own financial freedom, and that’s what GateChain is all about.
Park Michael: if you think it may be a hoax, you can investigate the team, check out the team advisor, Github technology and partnership to back up your judgment. But my advice is to always be proactive in exploring and experimenting with new services. Don’t trade blindly at the beginning, especially before you make a big deal. Also keep in mind that even good programs and services can have problems after months or years of regularly running its service, so be prepared to diversify.
Nguyen Nhat Quang: I know all about the tricks and I’m always on my guard in these situations. I consider myself lucky because I have never been afraid of cheating, even with more complex ones. I have encountered them, and they do impress me a lot. I am grateful for the deception and it let me know where the user’s pain point is. First, make sure both parties have reliable records and verify their identities. Only After confirming that the information is correct, can you proceed with the transaction.
Second, don’t leak relevant information to the third-party test program easily.
Third, if you don’t know well, you need to entrust a good intermediary to help you close the deal.
Nguyen Thi Hoa: in my experience, I have a few typical phishing cases to share with you: there was an elaborate fake online wallet that tricked a lot of people into installing it. Many users later reported that the mnemonic phrase was stolen and funds were lost. I remember a case about MyEtherWallet, using the same scam I mentioned. Now we can solve this problem with GateChain’s newly created wallet.
With blockchain technology constantly evolving and gaining its momentum , GateChain will continuously reinvent itself in a perpetual striving for innovation to gain a competitive edge.
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