Web3 is growing at a blistering pace, powered by the cryptocurrency market’s 2024 resurgence and AI’s rapid development. However, Web3 wallet security is still a cause for concern.
According to a report from Immunefi, US$1.4.9 billion of digital assets were stolen from January to November 2024. As cryptocurrency and NFTs become increasingly valuable, the need for tighter Web3 wallet security is more important than ever before.
To safeguard their Web3 wallets better, organisations are implementing any of these three security mechanisms: zero-knowledge proofs, multi-signature wallets, and security enclaves.
Find out more about them and which one is best for protecting your Web3 crypto wallet!
What Security Threats Do Web3 Wallets Face?
Common Wallet Vulnerabilities
Web3 wallets today blend convenience and security well. For the most part, you no longer need to write down your private keys in a notebook. However, we’ve established above that Web3 crypto wallets are not impenetrable. One common vulnerability is phishing. Bad actors prey on the trust and fear of wallet owners to access their login credentials and crypto assets.
Malware attacks which target computers and mobile devices are still prevalent as well. Hackers deploy malware like keyloggers and Trojans to not only steal your Web3 wallet’s login details, but credentials for other platforms too: examples include your email, internet banking, and social media accounts.
Weaknesses of Traditional Security Measures
Traditional security measures have been beefed up through the years. Passwords now have more stringent requirements, and two-factor authentication (2FA) adds another layer of security. However, these are still vulnerable to tactics like phishing and social engineering. Web3 wallet owners can be tricked into providing their details to hackers.
Furthermore, hackers can use traditional security measures against you. For instance, once they access your Web3 crypto wallet, they can reset your password and 2FA code to guarantee you’re locked out. From there, they can take their time to transfer your crypto and other digital assets and even ensure their trail is hard to track.
Three Security Mechanisms Web3 Wallets Implement
Zero-Knowledge Proofs (ZKPs)
Transparency in the Web3 crypto space is a double-edged sword. It ensures transactions between two parties are completely clear, but the information can be used by bad actors to create security breaches. Web3 wallets which implement ZKPs combat this by hiding certain transaction details, such as the sender and receiver’s account balances.
One Web3 wallet which integrates ZKPs in a unique manner is Portkey. Dubbed SocialLogin, this is a two-step processwhen Portkey users wish to validate a transaction. For example, connecting their Portkey wallet to a dApp. They need to actively sign the transaction, and use an existing social media account as an additional layer of verification.
Multi-Signature (Multisig) Wallets
As the name suggests, a multisig wallet is a Web3 wallet which requires at least two individuals to sign off on a transaction before it can be processed. This security mechanism is ideal for enterprise Web3 crypto wallets, where some or all executive management members have visibility and authority over every transaction performed.
Even if one decision maker’s account is hacked, it doesn’t mean the attackers can walk away with the Web3 wallet’s assets easily. The other members can deny the transaction request and lock down the hacked account. Multisig wallets are fuss-free to implement while improving security greatly at the same time.
Secure Enclaves (TEE)
A secure enclave, also known as a trusted execution environment (TEE), lets Web3 wallets lock away portions of their infrastructure. This prevents code from being tampered with. TEEs are usually implemented for computer chips, but can be done for software wallets through the operating systems they use.
Some areas which Web3 wallets implement TEEs would be creating wallets, generating private keys, and signing transactions. They’re sealed off from the rest of the wallet software, resulting in a lack of network connectivity. This wards off hackers as they can’t detect these ‘areas’.
Summary of Wallet Security Types: ZKP vs Multisig vs TEE
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In Closing
Web3 wallets are stepping up their level of security to give crypto owners greater peace of mind. However, the three security mechanisms listed above are not one-size-fits-all solutions. You need to pick a Web3 wallet which uses a mechanism that meets your needs. For example, single wallet owners would find a multisig wallet cumbersome.
Furthermore, it’s vital for you to stay up to date on the best practices for personal data security. These include selecting a Web3 wallet with a strong security track record, setting robust passwords, and regularly keeping track of your transaction history. Web3 wallets audited by recognised firms should be high up on your list.
Portkey is one such Web3 wallet, excelling in an end-2024 smart contract audit from Certik. This showcases how committed the Portkey team is to adhering to industry standards and providing users with the safest way to store their digital assets.
On the hunt for a Web3 crypto wallet that’s secure and easy to use? Try out Portkey on Android, Google Chrome, or iOS now!
*Disclaimer: The information provided on this blog does not constitute investment advice, financial advice, trading advice, or any other form of professional advice. aelf makes no guarantees or warranties about the accuracy, completeness, or timeliness of the information on this blog. You should not make any investment decisions based solely on the information provided on this blog. You should always consult with a qualified financial or legal advisor before making any investment decisions.
About Portkey
Portkey: Zero-Barrier Entry Into Web3Portkey simplifies your connection to the Web3 world with its cutting-edge ZK social logins and ZK social recovery, offering a zero-barrier entry for users. Integrating into the Telegram ecosystem, Portkey seamlessly bridges Web2 users to Web3 through blockchain, leveraging advanced zero-knowledge technologies for privacy and security without compromising convenience.
Built on the high-performance AI layer 1 blockchain platform aelf, Portkey provides a smooth transition and an enhanced user experience, setting new standards in the realm of Web3 digital wallets.
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