Tokenization technology is an immediately available solution that can be used to address critical gaps in blockchain and cryptocurrency security and promote consumer and institutional confidence, Rambus explains in a new paper which is available to download from the NFC World Knowledge Centre.
“The blockchain has the potential to touch all aspects of our everyday lives, from buying and trading cryptocurrency, to securing vital healthcare records, to proving that a tomato really is organic,” the company says.
But, before the transformative impact of blockchain technology can be safely realized, there are security challenges — such as the vulnerability of private keys — that need to be addressed, ‘The blockchain — Not as secure as you think’, explains.
“Unlike the private keys used to authorize cryptocurrency transactions for example, tokens cannot be used by a third party to conduct transactions if intercepted. This adds a layer of user-friendly security that complements the immutability of the blockchain.”
The paper begins with an overview of blockchain technology, how it is used to enable the buying, selling and ownership of cryptocurrencies and its potential use cases beyond the virtual money arena.
It then explains the role of public and private keys, the issues surrounding the safe storage of private keys — and the reasons why cryptocurrency owners and custodians have been the victims of significant thefts of funds.
The ebook then examines the roles of hot and cold wallets and of the multi-signature approach to security and explains how the tokenization of private keys holds the potential to promote consumer and institutional confidence in both blockchain applications as a whole and in cryptocurrencies in particular.