key management

Wyoming Takes the Lead in Blockchain Regulations, Will Others Follow?

Wyoming announced last month it may be the first state to make ‘blockchain banks’ a thing. If this sounds strange to you –– it’s because legally and conceptually it is. To date, hundreds of cryptocurrencies have roamed the blockchain network unchecked and unregulated.

When blockchain technology first emerged, many thought cryptocurrencies would change everything –– from how we make purchases to how we invest. But institutional investors need more than a cryptocurrency ledger to satisfy regulators that they can protect customers’ assets.

Now Wyoming is looking to change all that with the introduction of Bill H.R. 2144 (116) to the Wyoming State Legislature. Announced November 11th, the Bill outlines a path to legalization of SPDIs –– legally known as “special purpose depository institutions” –– which would serve business unable to secure FDIC-insured banking services due to their dealings with cryptocurrency.

Since February, a number of important bills were passed in Wyoming aimed at building the infrastructure for what will soon become the most crypto-friendly state in the US. In January, Wyoming’s Senate passed a bill allowing for cryptocurrencies to be recognized as money, and the same month passed another bill defining certain open blockchain tokens as intangible personal property. It’s even rumored that five new “blockchain banks” could bring as much as $20 billion in assets into Wyoming by 2020.

The rapid innovation of blockchain technology and the growing use of virtual currency and digital assets has resulted in many blockchain innovators being unable to access secure banking services. These kinds of bureaucratic legislative hiccups continue to stall the development of blockchain services and products in marketplaces the world over.

Now that’s all about to change, with Wyoming of all states leading the way to a more secure crypto future. With the newfound legal foundations for crypto-based products in place, young companies will now be left to face their next big challenge: protecting their customers’ digital assets from digital threats.

As long as innovators continue to use blockchain, legislators will need to keep pace with the rapid advancement of such technologies –– or lose out on the opportunity to provide the much-needed legal infrastructure for what is still known as the ‘wild west’ era of blockchain technology.

The Rise of Blockchain Banking (and Its Inevitable Downfall?)

As the financial industry begins its long-awaited move to adaptive blockchain technology, many banks are becoming increasingly open to the use of crypto-based solutions for digitizing assets. It’s no secret the future of banking is digital for many financial institutions looking to modernize their product offerings. It even appears likely we’re headed toward an era of national digital currencies backed by central banks. Hats off to Mike Orcutt.

But HSBC’s decision to be the first financial institution to move $20 billion worth of assets to a blockchain platform is possibly enormously rewarding––– or risky. While the future of blockchain-based platforms such as HSBC’s Digital Vault looks promising, security experts voice growing concerns over the management of such large amounts of digital assets.

While the rise in usage of blockchain technology has made financial asset management more transparent and accessible, the crypto world has seen its fair share of threats over the past decade. From Binance to Bitpoint to Quadriga’s wild story, the industry’s shift in reliance on the blockchain has its own perils.

Blockchains are particularly attractive to hackers since once they gain access to the private keys it’s game over and fraudulent transactions are very difficult to reverse(if at all). While blockchains have unique security features, they also have their unique vulnerabilities. As banks expand their digital solution, they will continue to face continuous ongoing threats to their blockchain infrastructure. As long as vulnerabilities as these exist, banks must learn to embrace innovative solutions that can keep their most sensitive assets secure.

 

Today we know that marketing tactics which branded blockchain technology as unhackable were simply misleading ––– and wrong. In total, since the beginning of 2017, hackers have stolen nearly $2 billion worth of cryptocurrency, mostly from exchanges, and that’s just what’s revealed publicly. Contrary to popular belief, these attackers aren’t just lone opportunists either, they’re sophisticated cybercrime organizations. According to Chainalysis, just two of these groups, both of which are still active today, have stolen a combined $1 billion from exchanges.

Whether the future of banking relies on the blockchain or paper-tracking is still up for debate. But if history teaches us anything, it’s that we’re still not out of the woods when it comes to protecting our most sensitive piece of data. Even if we’re HSBC. 

 

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Does One-Size-Fits-All key management solution really work for you?

We wrote earlier this week about key management, and how today’s solutions fail the little guy. On top of their high price points, inaccessible installation and overly complex management –– today’s cyber solutions from giants like Amazon, Microsoft and Google often fall short for mid-tier companies. Which doesn’t really make them solutions at all. As Biggie would say, just mo’ problems. For many 2nd and 3rd tier players, what they really need is pretty straightforward: a simple, affordable way to protect their most valuable digital assets.

In the (really) tiny corner of the world that is key management, most products out there are designed as one-size-fits-all solutions. Like those pants you bought on Alibaba, there’s just no guarantee they will fit. Maybe your hips are a bit wider, your legs a bit longer –– whatever it is, they were obviously not designed for you. So why wear them?

Without coming down too hard on the big retail, my point is: you still need pants. That’s kind of what it’s like for most mid-tired companies. Except in this scenario, many of these businesses also losing out on a ton of money on lost profitability. With products they can’t protect without losing an arm and a department, they sit unused –– a lost revenue stream that won’t ever see the light of day.

It’s almost revolutionary to think that a solution should be simpler. Like when Steve Jobs packed over 10,000 mp3 filed into a handheld iPod Mini. It killed the walkman. And that’s what our team at Hub Security has set out to do: be revolutionary. We’ve built a solution that is accessible, affordable and adaptable to any-sized business.

                                       

With the HUB platform, administrators can define customer policies and permissions and custom build an internal key management system that works for them. Like Lego pieces, HUB’s platform is built to grow at scale –– developing with you, as you develop your business. See? Like I said, revolutionary. With a low-barrier of entry, a relatively low price-point and 24/7 support, first-tier cloud providers have nothing on us.

Want to learn more? Check out the HSM device for yourself? Reach out to us at sales@hubsecurity.io or leave your details below        

 

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