Rambus is boarding the blockchain bus with the unveiling of Vaultify Trade, a platform that enables the secure storage and transfer of cryptocurrencies and other digital assets using proven, bank-grade, field-deployed tokenization and encryption technology.
The Sunnyvale, California-based company said Vaultify Trade is the first product that enables banks, exchanges, and investment portals to leverage tokens to secure the purchase, storage, exchange, and sale of cryptocurrencies. The company made the announcement at the Money 20/20 event in Las Vegas today.
“While cryptocurrencies represent significant opportunities, a major risk factor is that they are prone to theft, in large part due to the lack of strong security solutions for the blockchain,” said Jordan McKee, research director at 451, in a statement. “This undermines consumer confidence and limits the ability for financial services companies to offer products that help comply with regulations and best practices. With additional trust and transparency, the potential for cryptocurrencies to transform financial services can be realized.”
Blockchain, a decentralized and secure ledger that enables transparent transactions, is gaining increased traction across industries. The ledger is now extending beyond cryptocurrency into financial services, retail, real estate, health care, and insurance. While it provides a trusted and immutable record, the blockchain is not completely secure.
Blockchain stores assets of value, like cryptocurrency, at an address in a public ledger using a private key. Much like a card or account number to access funds, the key is all that is required to access that digital asset, and if it is lost or stolen, that value is gone. A multi-signature feature enhances the level of security by introducing additional distributed keys for recovery and authentication of transactions, but it still relies upon the use of original keys that are vulnerable to attack. Given the high-value financial and safety-critical nature of some proposed use cases, it is imperative that nothing alters data prior to its placement on the blockchain, Rambus said.
To deal with this gap, Rambus has created Vaultify Trade, which combines a multi-signature feature with proven, bank-grade tokenization technology to enhance security, confidentiality, and privacy by replacing sensitive credentials — such as private keys for blockchain and cryptocurrency — with a non-sensitive equivalent token that is unique to each transaction.
Unlike the private keys used to authorize cryptocurrency transactions, tokens cannot be used by a third party to conduct transactions if intercepted. By replacing sensitive private keys with a limited use token that can include domain controls for device or channel, tokenization mitigates fraud risk and protects the underlying value of credentials. This reduces cryptocurrency security risks, which have led to enormous losses, adverse brand impact, and suspensions of trading.
“Cryptocurrency is on the verge of going mainstream, but many of today’s consumers find cryptocurrency to be inaccessible and confusing and are concerned by high-profile hacks. In order to accelerate adoption, consumers are seeking a secure, familiar way to access, trade, and own cryptocurrency through their trusted banking or trading apps,” said Jerome Nadel, general manager of payments and chief marketing officer at Rambus, in a statement. “With over 100 billion transactions secured by Rambus technology, Vaultify Trade is a logical extension of our tokenization expertise. Banks, exchanges, and investment houses can now quickly incorporate blockchain technologies into their product portfolios, armed with the confidence that data, value, and assets are secure.”
Designed for cryptocurrencies and other uses, Vaultify Trade features include tokenized security — replacing sensitive private keys with domain-specific tokens to purchase, trade, and store cryptocurrency in order to limit vulnerabilities and improve trust. It also has multi-signature wallets, which require at least two signatures to confirm a transaction. And it has segregated wallets, which combine the security benefits of an offline cold wallet with the convenience of an online wallet through multi-factor authenticated access.