Coinbase's Cryptocurrency Exchange Head of Security Says Education is Their Biggest Challenge

Martin Philip, the head of security at Coinbase recently said that their biggest challenge is explaining to their customers the basics of cryptocurrency security, and especially to customers whose entire fortune depends on whether they can remember their passwords and keep their keys safe.

Coinbase, a San-Francisco based company, is a cryptocurrency portfolio that offers the easiest platform to buy, sell, and manage digital currencies. As one of the largest crypto trading and payment platforms, Coinbase is currently valued at around $8billion, after the E series fundraising of $300 million, making it one of the US's most highly valued companies. The president and chief coordinating officer of Coinbase, Asiif Hirji, said that the funds are aimed at accelerating the adoption of cryptocurrencies and digital assets.

Coinbase security concerns are valid

Many venture capitalists consider Coinbase a positive indicator for the future of cryptocurrency and especially after their move to create stable coin, a cryptocurrency that is backed by the US dollar. Martin Philip stated that talking about security to their customers in a way they can understand is now a global challenge to all cryptocurrency companies. Being a financial company, Coinbase deals with encryption on a day-to-day basis as a security procedure. 

The reason why there are major concerns about user-end Cryptocurrency security is the big difference between Cryptocurrency wallets and bank accounts. Bank accounts use cryptography, which is mostly limited to securing the bank's website and hiding personal information like social security numbers. With crypto wallets, the encryption is exceptionally fundamental since they are used to buy, spend, store, or track ownership of cryptocurrencies. This poses a new concept that customers have to understand to transact safely on Cryptocurrency platforms.

Crypto wallets and KYC

Crypto wallets are private or public keys that give Cryptocurrency ownership to a customer. The key is non-revocable, and if it got lost or compromised, there would be no way to recover the lost crypto value. Martin added that it is what" makes the stakes of theft of encrypted data more severe than say the theft of encrypted social security data at financial institutions. The consequences of loss are much higher, and attackers are much more aggressive about gaining access to the encryption."

Unlike in banks, Cryptocurrency transactions are irreversible, making customers susceptible to cold calls from scammers who pose as technical support. Coinbase uses Know Your Customer due diligence, as many banks today to help figure out customers who may be using accounts for illegal transactions. This has contributed to the steps Coinbase is taking to reassure investors that cryptocurrencies are not about shady deals.