Binance Self-Custody Web3 Wallet Safety and Security
Binance has recently launched its self-custody Web3 wallet.
👉 Self-custody wallets: Self-custodial wallets, also known as non-custody wallets, are digital wallets that allow individuals to manage and store their cryptocurrencies without relying on a third-party custodian, such as a centralized exchange.
👉 Web3 wallets: Web3 wallets are designed to interact with Web3 applications, decentralized applications built on blockchain technology. Web3 wallets can store and manage their digital assets, such as cryptocurrencies, NFTs, and other digital tokens.
Do You Want To Learn More?
All the information you need to create a Binance Web3 wallet is readily available at 'Frequently Asked Questions on Binance3 Wallet'
But, in this article, we will review some security and safety points that you must know, or at least understand, before creating and using the Binance Web3 wallet.
Is Binance Web3 Wallet a Self-Custody Wallet?
Yes, Binance Web3 Wallet is a self-custody wallet.
Binance Web3 Wallet employs Multi-Party Computation (MPC) to create three key shares, which are stored in different locations for added security.
As we will review in short, to access the Binance Web3 wallet, two key shares are required. And Binance has access to only one key share.
You, as a user, have access to two key shares.
You own two key shares = You own the wallet.
What Is Multi-Party Computation (MPC)?
Multi-Party Computation (MPC) is a cryptographic protocol that powers shared computation without compromising the security and privacy of data
👉 In MPC, there are no seed phrases. Only private keys.
Also, MCP alters the traditional method of storing private keys by eliminating the need to retain them in one sole location.
👉 Therefore, MCP lowers the risk of the keys being compromised and reduces the vulnerability of the system.
MPC Wallet: Key Shares, Backup, and Restore
For the safety of your crypto assets, there are three topics that you should know and understand before using the Binance Web3 MPC wallet.
Wallet Key Shares
When you create a Binance Web3 Wallet, it will generate 3 wallet key shares:
Share 1: Secured by Binance
Share 2: Stored on the mobile device
Share 3: Encrypted by the recovery password you entered, and backed up to your cloud storage (iCloud or Google Drive)***.
👉 *** Cloud storage (iCloud or Google Drive): We know that you use a strong and unique password plus Two-Factor-Authnetication 2FA to secure your Apple or Google accounts. So, Share 3 is very well protected. Well done. 👍
To access your Web3 Wallet, you must have at least 2 wallet key shares.
If one of the key shares is compromised, the remaining two are still securely encrypted to protect your assets.
👉 But if a hacker has access to mobile device and cloud storage, the assets can be stolen (but this should only happen to those who are very security and safety negligent)
Wallet Key Backup
To prevent the loss of assets, you need two of the three key shares.
If you lose access to your mobile device, you will need the Binance and Cloud key shares.
Therefore you must:
❗ Back up your Web3 Wallet
👉 To be on the safe side, make sure that you still have access to your cloud account
❗ And store your recovery password securely.
👉 And here 'SECURELY' is very important.
Wallet Key Restore
What is the benefit of having a wallet key backup if you don't know how to restore it?
Restoring your Binance MPC wallet seems to be a quite straightforward task, as described in this 'How to restore my Binance Web3 Wallet' guide.
Private Keys Emergency Export
As described by Binance: 'Binance Web3 Wallet offers a unique ' Emergency Export' feature. This innovative tool lets users regain access to their assets independently without the need to engage with their Binance account '
This is an important feature because, in case of extreme emergencies, you can export your wallet's private key and restore it to another wallet.
Congratulations on completing this 5-minute digital safety power-up.
We hope this short article has helped increase your crypto safety knowledge and awareness, and the 5 minutes read was worth the time.
For more short but important articles about Crypto Safety topics, please consider subscribing to our blog.