Blockchain technology has been adopted by numerous industries and is set to become a bigger influence over almost every aspect of our lives. From clothing to food to housing to transportation, the applications for blockchain seem limitless.
However, that doesn’t mean the process is seamless or that development doesn’t have challenges. One of those is the complicated addresses and complex mnemonic phrases, which are difficult for users to memorize and manage. Thus, users need a practical solution to enable users to best manage and access digital assets, turning to private key escrow services
Existing Private Key Escrow Services Have Innate Weaknesses
There are existing solutions as the market for third-party private key escrow services is emerging. These solutions do answer part of the problem — they reduce the intricacies related to access. This increased usage and scaling of transactions expanding also presents an overwhelming pressure for providers regarding costs.
These existing systems fall short on security as well. Consider that those solutions only use software protection and store private keys in the form of digital files. Each transaction needs to call the file stored in the server to complete the decryption and signature transaction on a traditional server. This system is exposed to tampering, as it only holds low-level security barriers.
Mt. Gox Is a Stark Reminder of the Realities of a Hack
This risk of compromised keys is illustrated with the example of Mt. Gox, once the world’s largest bitcoin exchange, suffered a devastating hack wherein approximately 850,000 of bitcoin, worth about $473 million in 2014, were stolen due to hacking of its faulty computer system. The hack is believed to have been carried out by compromising a computer belonging to a company auditor. This resulted in Mt. Gox filing for bankruptcy. There have been arrests in the hacking with charges of laundering.
These vulnerabilities and the need to overcome the risks of private key escrows led VeChain to develop an HSM based key escrow turnkey solution.
Improving Efficiency and Enhancing Security, VeChain Introduces HSM Based Key Escrow Turnkey Solution
Enterprises need a solution that solves the shortcomings of existing private key escrow services. Through heavy investments in R&D, VeChain has conceived a unique solution with an HSM based key escrow service. The new product officially launched at the 2019 VeChain Summit held at the Fort Mason’s Festival Pavilion in San Francisco on April 18, 2019.
VeChain’s CTO Jianliang Gu introduced the HSM based Key Escrow Turnkey Solution at VeChain Summit 2019
This new approach to key escrow represents a breakthrough in the current software protection practices in the industry. It combines software and hardware to improve transaction efficiency and exceed the security needs of enterprises.
This solution is available for independent deployment, once authorized by VeChain, enterprises and developers can build their own key escrow services based on the HSM Based Key Escrow Turnkey Solution to better serve their customers.
Watch Jianliang Gu, VeChain’s CTO, introduced HSM based Key Escrow Turnkey Solution at the VeChain Summit 2019.
A Look Inside: How Does the HSM Based Key Escrow Solution Work?
HSM based key escrow turnkey solution, developed based on the hardware products from the world-leading HSM manufacturer Gemalto, incorporates VeChain Firmware with blockchain features. Suitable for blockchain applications, HSM based key escrow turnkey solution boasts a superior secure storage capability to prevent information leaks.
What Happens if an Attack is Detected?
Attacks are inevitable in the cybersecurity world. When the key escrow detects an attack, the memory self-destructs to prevent any leakage from the HSM hardware device. At the same time, the solution is equipped with backup cards, which can recover the information when an unexpected HSM malfunction occurs.
Sign Transactions Via Algorithm Strengthening Security
This unique concept improves the level of security for private keys, transactions, and other applications. When signing a transaction, there is no need to call the KeyStore file. Transactions can be signed through algorithms for optimal efficiency. Since there is no need to export the private key, the possibility of leaking can be eliminated, making it even safer.
Implementing the Solution: The Digital Carbon Ecosystem
Currently, the HSM based key escrow turnkey solution has been implemented in the “Digital Carbon Ecosystem,” jointly developed by VeChain and DNV GL, a global quality assurance and risk management company. Other parties participating are BYD, PICC, Tsinghua University’s Sino US Relations Research Center, and Shanghai Xiandao Food.
The goal of the “Digital Carbon Ecosystem” partnership is to advance consistency with the UN’s Sustainable Development Goals, relating to environmental practices. These companies are motivated to build a digital low carbon ecosystem to reduce global carbon emissions.
During the VeChain Summit 2019, Sunny Lu announced that this Carbon Ecosystem has signed a deal with the United Nations Development Programme (UNDP), with further details to be released as the ecosystem develops.
The effort uses the VeChainThor’s blockchain technology and the Internet of Things (IoT) to track ecologically beneficial behavior, providing rewards in carbon credits for those enterprises and individuals that adopt sustainable practices.
Digital Carbon Ecosystem is responsible for providing key storage services for its customers, enabling vehicle owners to enjoy secure, reliable, and convenient blockchain services without recording complex account names.
The Future of HSM Based Key Escrow: New Applications Emerging
As the digital asset ecology continues to mature, the solution will be further employed in the financial and insurance industries. Key escrow companies will also be able to use it as they develop various products, based on secure technology, to meet market demand. It could reduce development costs and improve development proficiency.
Moving forward, VeChain will continue to use its security protection experience, accumulated in practice, to continuously optimize the HSM based key escrow turnkey solution in terms of risk control, algorithms, and strategies, meeting the increasing security protection needs of enterprise clients and enhance the user experience.
Learn more about the HSM based key escrow turnkey solution by contacting us at firstname.lastname@example.org.
About Turnkey Solutions
Turnkey Solutions are designed to further promote the development of blockchain applications on the VeChainThor Blockchain, and essentially eliminate the high technical threshold, substantially lower the costs, and significantly reduce the time to market for SMEs in blockchain integration. With the development tools provided by VeChain, such as general interfaces and API documents, the solution can integrate with the existing business of the enterprises immediately with zero development requirements. They’re also available as turnkey package for the enterprises and developers to deploy the solution independently and conduct custom development in accordance with their own management models and business demands, adding value to their business and meeting the diverse demands of the market.
Turnkey Solutions include:
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HSM Based Key Escrow Turnkey Solution.