According to the Coinbase blog, Coinbase wallet owners can now, as of 12th February, “backup an encrypted version of your Coinbase Wallet’s private keys to your personal cloud storage accounts, using either Google Drive or iCloud.” This new feature provides a safeguard for users, protecting them from losing their funds in the event that they lose their device or misplace their private keys.
The importance of private keys cannot be overstated. Coinbase’s statement emphasised the point, saying,“ The private keys generated and stored on your mobile device are the only way to access your funds on the blockchain. Owners of ‘user-controlled wallets’ like Coinbase Wallet sometimes lose their devices or fail to backup their 12 word recovery phrase in a safe place, thus losing their funds forever.”
This move by Coinbase means that users can store the ‘recovery phase’ in encrypted format on their cloud storage accounts. Coinbase points out that neither Coinbase nor the cloud services will have access to users’ funds, because the recovery phrase key is unlocked by a password known only to the user. The encryption used for the backup is AES-256-GCM, which is only accessible through the wallet mobile app.
In the future, Coinbase plans to add other clouds in the future, but for the moment Google Drive and iCloud are the only ones available.