US crypto exchange Coinbase announced this Tuesday that the users of its wallet would be able to create backup encrypted versions of their private keys with the help of iCloud and Google Drive cloud services.
The company stated in the blog post:
"This new feature provides a safeguard for users, helping them avoid losing their funds if they lose their device or misplace their private keys... If you lose your device or get signed out of the app, you can easily regain access to your funds with the combination of your personal cloud account (iCloud or Google Drive) and your password”.
As Coinbase spokesperson explained, private keys are the only way to get access to the funds are generated and stored on a mobile device. However, it should be taken into account the fact that the device can be lost or stolen, which would mean possible loss of all coins by the customers, which cannot enter the 12-word phrase.
The backup data will be "encrypted with AES-256-GCM encryption", while access to it can be got only via Coinbase Wallet application. Besides, the company pointed out that they would have access neither to funds nor passwords.
At the same time, Coinbase also added:
"Because we offer cloud backup as a convenience, we recommend that users also backup their passphrase manually after activating the cloud backup service."
Meanwhile, the community express certain scepticism about such move citing previous hacks on weak passwords and other failures. For example, CEO at Kraken Jesse Powell shared his opinion on Twitter, saying "cloud storage, while convenient, is constantly compromised, especially with all the SIM porting. 99% chance the people who would unwittingly use this do not have passwords strong enough to withstand professional cracking.”