Digital ecosystems and payment gateways have become popular in the last 10 years. Such tools have interested not only enthusiasts who want to get easy money but also large investors. There is a lot of hype behind security breaches in the BTC ecosystem, with thousands of users jumping into the Blockchain. Most e-wallets are encrypted using basic methods that ill-wishers can easily crack. The ineffectiveness of passwords and PINs has made biometrics the best alternative method to integrate into the cryptocurrency ecosystem.
The latest findings from reputable experts such as ABI Research show that the Coronavirus pandemic will contribute to lower biometric device revenues over the next 3-5 years. In 2020, the market fell by $2 billion. Even so, innovation has not stopped. Biometric security will evolve based on the use of contactless vision systems supported by Artificial Intelligence. Let’s take a look at this in detail.
Blockchain & biometrics — key perspectives
BTC is an unregulated coin that is used in 100+ countries — the USA, Japan, Great Britain, Canada, Estonia, Australia, Denmark, Finland, Netherlands, Sweden, and South Korea. The governments of India, China, and Mexico tried to adopt the Blockchain by imposing taxes on the holders of e- wallets. Due to such regulation, the size of investments fell. Although this is not the only problem for thousands of enthusiasts on different continents. Last year, investors lost $7.7 billion due to cryptocurrency scams.
As cryptocurrencies are essential for e-commerce, governments around the world are looking for ways to implement their own national BTC ecosystem. The same applies to large corporations whose business is the production of digital content, virtual platforms, and different equipment. In fact, over 70 percent of financial institutions are exploring the concept of CBDCs. But for the implementation of such strategies, they will have to solve the security problems. This will not be an easy path for most companies.
Types of biometric protection
Biometric authentication is based on a user’s personal characteristics which are compared to verify identity. If the data matches that of a validated user, then that person will be allowed to run the device. Otherwise, any attempt to gain access will be denied. Previously, such devices were mainly used by employees of the security services of banks and large industrial enterprises.
| Fingerprint Scanners | This is one of the most common types of authentication. Such innovative technology is widely used by developers of smartphones and many other devices — wearable devices, electronic locks, and safes. Very often, people who want to protect their cryptocurrency wallets prefer this method. The fingerprint is the most unique form of user identification. |
| Voice identification platforms | The software and sensors process the characteristics of the voice to distinguish between different people. Using this identification method involves the creation of a basic profile. With such a methodology, people can prevent security risks associated with imitating the user’s voice. |
| Eye scanners | There are basically 2 types of eye scanner solutions available — iris recognition scanners and retinal scanners. Bright light is directed towards the eye which creates visible patterns of blood vessels. Such a picture is read by the scanner and then information is received as a file compared with the verified pattern from the database. The iris scanner captures patterns in the color ring around the pupil of the eye. |
Main challenges
As the popularity of smartphones and the use of mobile devices for online shopping have grown, leading companies have begun to use money transfers and payment gateways. According to a study, biometrics will enable $2 trillion. We are talking about volumes of authenticated in-store in 2023. But these are not the highest figures for the industry.
Moreover, according to Juniper, about 90% of flagship brands support facial recognition. For 80 percent of them, voice-authenticated tools are available. The introduction of such technology involves some contradictions. The fact is that the unique physical characteristics of a person which can be compared with proven parameters are stored in a special database. This means that data can be collected and used for commercial purposes. Simply put, using biometrics for marketing purposes is not always legal.
Regulation against biometrics by law
With the introduction of Apple Pay in 2014, the American company took an important step in the development of the digital industry. Due to such an innovation, it has become easier for users to access services. The same goes for those who want to shop online. The secure and convenient use of mobile banking was soon adopted by well-known companies such as Samsung and Google.
Now, it’s difficult for an ordinary user to imagine a smartphone without NFC. But this does not mean that there are no problems with the introduction of this technology. Contact biometrics technologies such as fingerprint and vein identification are undergoing a severe downturn, along with increased unemployment and other social problems. It’s due to new government regulations in the EU. The parliaments of most countries have ratified new rules regarding the collection and processing of personal data.
| Restriction of the data storage period | The processing of personal data is permitted only within the framework of achieving specific security goals. It is not allowed to collect information for use in marketing purposes. |
| Target limitation | Processing is carried out only for legitimate purposes which are clearly stated in the privacy policy terms |
| Accountability | The controller is fully responsible for all processes related to the use of personal data and must confirm compliance with the requirements of the GDPR |
Manufacturers of biometric technology are struggling to comply with the new stringent regulations. Such rules were adopted for the safety of users and personnel of large enterprises — banks, educational institutions, security services, and others. Fines for violation of the BDSG are possible up to 50,000 euros.
Biometric security & innovations
According to experts, in 2020 the volume of the global market for biometric solutions amounted to almost 30 billion US dollars. In the next five years, the growth of investments in this area will increase by 5-10%. The US National Institute of Standards and Technology (NIST), which conducts extensive testing of contactless fingerprint readers, announces dozens of new products each year. Most products are for commercial purposes, scientific laboratories, and institutes.
Blockchain & different types of wallets
Some digital currencies have become popular since people began to implement alternative account verification. For users of some platforms, there are even free coins for those who prefer such authenticate. Wallet security and authentication of online login transactions are key 2 use cases for biometrics. Basically, people use hot wallets and cold wallets.
| Hot wallets | Cold wallets |
| This category includes laptops, wearable devices, and tablets. With biometrics, users can protect keys stored in the device’s memory. | A cold wallet refers to devices such as a USB or hard drive. It’s a more secure solution, which is why investors who spend large volumes of cryptocurrencies prefer this method. |
Conclusion of contracts & digital signatures
Cryptocurrency transactions can be verified using digital signatures. This is the most secure way to protect e-wallets. The key is created by combining biometric — facial information, fingerprints, and user data. Now, IT and biometrics enthusiasts are rapidly digitizing the commercial sectors. Leading development teams make financial services faster and easier. But, many people are still skeptical about the security tools — they are wary of digital payment scams.
According to Chainalysis, the total number of cryptocurrency transactions has increased by 567% over the past 10 years, reaching $15.8 trillion. But due to the rise of e-commerce, the number of fraudulent schemes is also growing, reaching an all-time high in 2021. $14 billion was stolen from cryptocurrency wallets in 2021, compared to $7.8 billion in 2020. So, any identifier used to authenticate a message or the contents of a file will be useful.
Key takeaway
Although people are not fully aware of the technology behind the cryptocurrency ecosystem, investments are skyrocketing. Companies such as Tesla, Facebook, Microsoft, and Expedia have adopted Bitcoin for their services and products. In addition, a survey in the UK showed that people prefer to pay online with BTC. This means that big changes are coming in the market.
We live in the era of information technology when IT platforms and various online tools become drivers of economic development. Now, it’s impossible for an ordinary user to imagine life without the Internet and social networks. But, the integration of such solutions into global networks caused a lot of issues. This applies to the collection and storage of personal data. Most issues become even more urgent in connection with the entry into force in 2018 of the EU General Data Protection Regulation.
When it comes to the matter of payment gateways, e-wallets, and transactions, security is always paramount. For example, bank representatives ask us for biographical data and one-time access codes. Similarly, a user must verify their identity with signatures and PINs when creating a cryptocurrency wallet. So, the rapid introduction of biometrics will inevitably lead to increased investment in Blockchain.
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