Coinbase Wallet now allows backup of private keys on iCloud, Google Drive

12 Feb, 2019
by David Borman
Coinbase Wallet now allows backup of private keys on iCloud, Google Drive

Coinbase announced today that its Coinbase Wallet platform will now allow users to backup their private keys on their personal iCloud or Google Drive accounts, with the hope of making it easier for recovery should they lose access to their device or other issue.

It is not uncommon for users to lose access to their crypto wallets by accidentally losing their backup seed phrase, and this prompted Coinbase to try to come up with another option for consumers. Their solution is to allow users to store an encrypted backup of their private keys on their own personal cloud storage account. Currently iCloud and Google Drive are supported.

Read more: Coinbase Wallet now supports BTC, store your BTC on your Crypto Wallet app

Users make a unique password to unlock the encrypted keys, and so only need to remember one password, not a whole recovery seed. Though this may help some users, many on twitter pointed out that this at best goes against decentralization, and at worst could be a huge security risk.

The main concern is that should either cloud service get hacked, thousands of users private keys could be compromised. The counter-argument is that these keys are themselves heavily encrypted so as long as users use solid passwords they should be safe even if accessed by a third party. Coinbase and some on twitter defended this choice along these lines.

Ultimately each user can ask themselves if the benefit of another backup is worth the inherent risks and trust issues. The most hardcore will likely always prefer to hold their own personal backups of any relevant keys and recovery phrases, though others might prefer the convenience of having a cloud backup and trust their password is sufficiently uncrackable. Coinbase will leave it to each user to decide for themselves.

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