While the number of incidents of hacking and fraud related to cryptocurrency exchanges and wallets has been declining since the early days, the popular press still likes a good anecdote of a naive investor losing money in the “Wild West” of the cryptocurrency world. Substantial improvements have been made largely owing to advances in technology over the more secure Ethereum Blockchain. Nonetheless, even Vitalik Buterin, the developer of the Ethereum Blockchain, concedes more work needs to be done.
In its efforts to be the Fort Knox of digital asset wallets and exchanges, Swiss-based Eidoo could tick off most items on Buterin’s list. Its battery of software engineers are developing solutions to ease of use, security, accountability, standardization, and interoperability weaknesses in both Ethereum and Bitcoin.
A super crypto wallet to the rescue
By locating in Switzerland’s ‘CryptoPolis’, Eidoo is benefitting from synergies with other Blockchain and cryptocurrency technologies for its ambitious project. Eidoo is doing much more than placing the two most popular cryptocurrencies in the same wallet. Its Bitcoin and Ethereum teams are working diligently to develop applications that provide a new level of interoperability between the two.
The integration of cryptocurrency applications is no small feat. To provide a more simplified, intuitive user experience, Eidoo is taking on security, privacy, audibility and standardisation issues, among others—and to many observers, winning.
The multi-asset manager views itself as a value-added integrator, aiming to satisfy all user needs in one application. Value added services include debit card recharging and digital identity solutions. Much of the added value will be enabled by underlying Blockchain technology enhancements unseen to users.
A new CryptoPolis
One of Eidoo’s neighbors among the bucolic, green hills of Chiasso, Switzerland is Digital Identity, an investment firm in cryptocurrency infrastructure, whose senior executives are co-founders of Eidoo.
New CEO Thomas Bertani not only brings experience with cryptocurrency exchanges (as founder of cash-to-Bitcoin exchange Bitboat) and high performance Blockchain computing (Bitcoin mining semiconductor chips and systems maker CoinTerra) to Eidoo, but also an important piece of the technology puzzle. His company Oraclize provides the all-important security layer to cryptographically secure the data in the smart contracts.
As fintech startups introduce more peer-to-peer networks, data corruption and tampering are greater risks. Many of these platforms are being run by unknown smaller startups. Oraclize’s Ethereum authenticity proofs—cryptographic engine machines—take the data and security handling out of the hands of the intermediary.
This secure authenticated data-transport-layer allows Eidoo’s Blockchain software engineers to focus on building the exchange and interoperability across currencies. Currently, two teams — an Ethereum and a Bitcoin team—are working fervently on applications. Additional cryptocurrencies will be added in the future.
One password to multi-wallets
Besides the underlying technology enhancements, as digital wallets become multi-asset storage spaces, ultimately user uptake of cryptocurrency wallets will depend on their ease of use.
Bringing the Blockchain-human interface down to earth entails providing the user with a single, intuitive interface. With Ethereum forecasted to pass Bitcoin in market capitalization this year, and new custom tokens launched weekly through Initial Public Offerings (ICO), interoperability between the two cryptocurrencies is becoming more important.
Eidoo simplifies and secures wallets by allowing users to access their cryptocurrencies in one place through one password — comprised of 12 words.
Another way Eidoo distinguishes itself from other popular cryptocurrency wallets is by offering a wallet that automatically recognizes ERC20 tokens. Like any Ethereum token, ERC20 can represent physical assets such as gold, an insurance contract, or proprietary tokens such as Golem.
ERC20 tokens differ from standard Ethereum tokens in that they comply with predefined rules that improve security and compatibility with other ERC20 tokens. While many Ethereum tokens adhere to ERC20 standards, a token may use part but not all of the ERC20 rules. Moreover, they may change those rules on subsequent projects.
With the high number of ICOs involving Ethereum tokens, rules that ensure the tokens will function and interoperate across wallets are critical to maintaining the integrity and value of Ethereum tokens. Conceivably, all Ethereum coins may need to be ERC20 compliant in the future, to be creditworthy and attractive to users. A non-ERC20 token that could pose interoperability problems in the future is analogous to buying low grade gold. It will be much harder to find counterparties wanting to trade in the token.
Eidoo is not the first to combine a wallet and cryptocurrency exchange. A decentralized exchange eliminates counterparty risk, ensures privacy and can be audited through immutable contracts whose tamper-proof ability can be verified through cryptographic proofs.
At the same time, these advantages can introduce complexity and slower trade execution. Exchanges need to operate at better-than-lightening speed to compete with the state-of-the-art fiber optic communications systems providing professional traders with a critical edge in trade execution.
A major speed bump is the time and computational power it takes to download the entire Blockchain of a transaction, the smart contract. Eidoo is developing an Ethereum light client that will optimize this process on mobile devices by avoiding the need to download the entire Blockchain.
We have only touched upon some of the super fixes to cryptocurrency storage and trading Eidoo is working on. For more on the systems integrator’s user-centric solutions for its multi-asset wallet and exchange, see the white paper. But keep in mind, Eidoo is much more than a white paper. Eidoo has a complete functioning product ready for release. While some ICOs are still a concept in writing, Eidoo is ready to advance to the commercialization stage.
Eidoo is leading the ICO of the Eidoo token (EDO), which starts on Oct. 4 and ends on Oct. 16. The sale will make 20 mln EDO at $2.30 per token available to purchase with Ethereum. To access the sale, download the Eidoo app for IOS or Android.
– Catherine Leona, Guest Author