Binance Self-Custody Web3 Wallet Safety and Security

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16 Nov 2023
111

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.


_____________________________________________________________________________________________
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20 Comments

B
Teko81
Very interesting article! Thank you
The decision to choose a web3 wallet will have to wait a little longer.
andrewsaul
I don't understand this. Binance already had a self custody wallet: Trust Wallet. They bought it years ago. Why launch a competitor to your own wallet?
LukeJoseph
I'm gonna take a look. I used to use Binance app alot. But as things progress, having another wallet other than metamask and offline wallet could give an option to segregate assets. Thanks for sharing!
now
I still don't believe this Binance Web3 self custody wallet
abbas536
Great.
hangthy
Binance web3 wallet is the best wallet that I've used.
great article
abbas536
Great Article
nice article thank you
Entrep
This is good
I will download binance app and test it
For some reason it doesnt show me the backup button
I'll probably use it, but it seems like the usual self-custody wallet that most exchanges have nowadays, nothing new, in short...
This is good post
mkmizan
Very good Article.Binanace web3 wallet is the best and most trusted wallet.
bulpasaur
Thanks for the article