GK8 Cold Vault🔍 Last analysed 4th April 2022 . Custodial: The provider holds the keys
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Do your own research!
Try out searching for "lost bitcoins", "stole my money" or "scammers" together with the wallet's name, even if you think the wallet is generally trustworthy. For all the bigger wallets you will find accusations. Make sure you understand why they were made and if you are comfortable with the provider's reaction.
The Analysis ¶
On its front page:
An enterprise-grade custody platform that enables financial institutions to offer services over digital assets with 100% protection from cyber attacks
GK8 claims to have:
PATENTED UNIDIRECTIONAL SOLUTION: CREATE, SIGN AND SEND BLOCKCHAIN TRANSACTIONS WITH NO INTERNET CONNECTION
GK8’s commercial custodial solution involves a combination of a “true” airgapped storage solution in combination with a patented MPC (multi-party computation) wallet solution.
GK8’s innovation and cyber protection are rooted within the cryptographic layer itself: any hardware deployment is optional, used for added protection against physical and side-channel attacks.
Further material reads:
The vast majority of funds are stored in the unreachable airgapped vault, out of reach of hackers. Only a fraction of the assets are managed by a secured patented MPC network, used for high-frequency automatic transactions.
They previously held a hacking bounty for their cold wallet. The prize was $250,000. Nobody won the prize.
GK8, with Lior Lamesh (CEO) and Shahar Shamai (Co-founder and CTO) have several patent applications and patent under GK8:
- Publication No.:20220051240 - TRANSFERRING CRYPTOCURRENCY FROM A REMOTE LIMITED ACCESS WALLET
- Patent No: 11251943 - Sharing a secret between an isolated device and a network connected device
- Publication No.:20220021521 - SECURE CONSENSUS OVER A LIMITED CONNECTION
- Publication No.:20210367793 - SYSTEMS AND METHODS FOR SIGNING OF A MESSAGE
- Patent No: 11088851 - Systems and methods for signing of a message
- Publication No.:20210049591 - CRYPTOCURRENCY WALLET AND CRYPTOCURRENCY ACCOUNT MANAGEMENT
Patent No: 11251943’s abstract reads:
Methods, system and devices for sharing a secret between an isolated device connected to a network through a transmit-only unidirectional secure channel and a network connected user device, comprising generating a secret value divided to first and second components, transmitting the first component, via the unidirectional secure channel, to one or more computing nodes of a distributed system, and transferring the second component, via a tamper-resistant unidirectional insecure channel, to the network connected user device associated with the user to enable the network connected user device to reproduce the secret value by combining the first component received from one or more of the computing nodes with the second component.
Gk8’s commercial service is directed towards enterprise-level and state-level customers. This means banks, cryptocurrency exchanges, governments, other custodians and other businesses. As they themselves have mentioned, their main selling point is the crypotographic layer itself and not on any spefic hardware. There are however, renderings of their Cold Storage Vault, which looks like a secured laptop. There is also one possible video of the device from one of their customers, but the video was marketing oriented and the device could only be a prop.
With no actual device speficiation sheets, no reference to the project as Open Source and with tacit claims that they are a custodial service, it is safe to assume that GK8 is a custodial service.
As the provider of this product holds the keys, verifiability of the product is not relevant to the security of the funds!
As part of our Methodology, we ask:Is the product self-custodial? If not, we tag it Custodial!
A custodial service is a service where the funds are held by a third party like the provider. The custodial service can at any point steal all the funds of all the users at their discretion. Our investigations stop there.
Some services might claim their setup is super secure, that they don’t actually have access to the funds, or that the access is shared between multiple parties. For our evaluation of it being a wallet, these details are irrelevant. They might be a trustworthy Bitcoin bank and they might be a better fit for certain users than being your own bank but our investigation still stops there as we are only interested in wallets.
Products that claim to be non-custodial but feature custodial accounts without very clearly marking those as custodial are also considered “custodial” as a whole to avoid misguiding users that follow our assessment.
This verdict means that the provider might or might not publish source code and maybe it is even possible to reproduce the build from the source code but as it is custodial, the provider already has control over the funds, so it is not a wallet where you would be in exclusive control of your funds.
We have to acknowledge that a huge majority of Bitcoiners are currently using custodial Bitcoin banks. If you do, please:
- Do your own research if the provider is trust-worthy!
- Check if you know at least enough about them so you can sue them when you have to!
- Check if the provider is under a jurisdiction that will allow them to release your funds when you need them?
- Check if the provider is taking security measures proportional to the amount of funds secured? If they have a million users and don’t use cold storage, that hot wallet is a million times more valuable for hackers to attack. A million times more effort will be taken by hackers to infiltrate their security systems.
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