Although progress continues to be made in the area of mobile Bitcoin wallets that are both convenient and secure, the reality is that we’re still missing that perfect solution for safely using Bitcoin with our mobile phones. Hardware wallets and multi-sig addresses have been moves in the right direction, but it turns out that the iWatch could be the missing ingredient that wallet developers have needed this entire time.
The main problem with secure Bitcoin payments on the go has been the fact that people usually only have one device with them when they’re away from their home computers. With the introduction of the iWatch and other fashionable smartwatches, we could be looking at a situation where now everyone has two computing devices with them whenever they leave the house.
The Importance of Multi-factor Authentication
When using Bitcoin in a secure manner, it always makes sense to have multiple devices for authentication purposes. For example, if you’re going to spend some bitcoins from your blockchain.info wallet, then you should have a second password sent to your phone by text message to make sure only someone who has both your wallet password and physical access to your phone can use your account. Apps like Google Authenticator and Authy also make this process even easier.
The main reason that this second form of authentication is needed in the Bitcoin world is that the computing devices that people use on a daily basis are rather insecure. One piece of malware could wipe out your entire Bitcoin savings if you aren’t careful, and this kind of hack has taken place plenty of times in the past. When multiple devices are required for authentication, it adds an extra layer of security where a hacker would now have to successfully attack two devices rather than just one.
The iWatch is Perfect for Two-factor Authentication
While a smartphone makes the perfect two-factor authentication companion at home, the reality is you don’t want to have to carry two mobile phones around with you all the time to enjoy this level of security on the go. If the iWatch is the device that is able to bring secondary devices into the mainstream, then we could be looking at a situation where smartwatches make as much sense for mobile two-factor authentication as the smartphone currently does for secure logins at home. By asking for a second form of authentication from an iWatch, wallet providers can help users keep their bitcoins away from hackers and phone thieves.
A Wallet Developer’s View
To make sure that the idea of using a smartwatch as a device for two-factor authentication made sense, I reached out to Chris Pacia. Chris is one of the lead developers of the Bitcoin Authenticator wallet, and his current project takes advantage of multi-sig addresses to create a new form of decentralized two-factor authentication. When asked about the idea in general, Chris stated, “It should be able to work.” Pacia went on to comment about the device could offer two-factor authentication through bluetooth, NFC, or even TCP. The wallet developer also pointed out the smartwatch’s advantage of actually having a screen. “That was the problem with that SigSafe“, he explained. With this statement, Pacia is pointing out that it’s better to actually be able to confirm the details associated with a transaction are accurate before signing it with a private key.
As smartwatches rise in popularity over the next few years, it will be interesting to see which wallet provider is able to come up with the perfect security solution for mobile Bitcoin payments.