Bitcoin exchange Coinbase tries to quell security concerns with 'vault' service
Coinbase, a prominent startup for buying, selling and storing bitcoins online, is offering a free security feature that it hopes will do a better job at keeping bitcoins safe.
The company announced a free, optional service called the Vault, which adds several layers of security to its online wallet service.
The feature comes following numerous cases of bitcoin theft, and breaches of the services that store them, by cybercriminals. Mt. Gox, once the largest Bitcoin exchange, was forced into bankruptcy after a massive hacking incident.
Bitcoin transactions are irreversible and the technology is meant to be free of a central overseeing authority, making it all the more attractive to cyberthieves.
Coinbase’s vault adds some barriers to the mix, through additional time and steps for verifying transactions. While Coinbase’s basic service could be considered to work like a checking account for fast and easy transactions, the vault functions like a savings account aimed at Bitcoin highrollers.
Vault users can add a 48 hour delay to their withdrawals, Coinbase said, during which the company will contact the account holder to make sure they approved the withdrawal. Multiple people or companies can also create Vault accounts, which can be configured to require their sign-off for transactions to go through.
Multi-signature technology to let customers manage their own security is also in the works, the company said. The Vault service is currently rolling out to 5 percent of Coinbase’s customers, with general availability scheduled for July 16.
The Vault will be free to set up, apart from Coinbase’s regular 1 percent fee whenever users buy or sell bitcoins.
Services like Coinbase’s vault are strongly needed to provide some additional security around Bitcoin. Xapo, a rival service, has a similar goal with its own “vault” storage.