World’s first offline system for transacting cryptocurrencies!

[Henri Cartier]

Recently, I was reading this news that Israeli cybersecurity startup GK8 has developed the first system that enable the blockchain transactions without the need for an Internet!! How can this be Possible?

Well the new system uses GK8’s proprietary cryptographic techniques that enables the transactions to get executed without Internet. The company raised $4 million in a funding round led by Discount Capital, a venture arm of one of Israel’s three largest banks, Discount Bank, and Marius Nacht, a co-founder of cybersecurity giant Checkpoint.

As reported by Globes, GK8’s new cryptographic techniques allowed the company to develop a cold wallet with “hot wallet functionalities,” securing user funds from hackers and cyberattacks.

GK8 is currently targeting financial institutions, custodians, exchanges and hedge funds which hold cryptocurrencies. GK8's custodian technology is already operational and helps to securely manage digital assets for clients such as eToro, a global multi-asset trading and investment platform.

Current custodian solutions used by financial institutions and state-owned enterprises do not meet institutional scale security standards. In addition to existing security protocols, digital assets based on blockchain technology need a higher security standard since signed transactions are irreversible. To meet this challenge, GK8 experts have developed this technique to provide a secure environment to sign blockchain transactions and execute automatic reconciliation confidently.

The company’s techniques, protected by five registered patents, can bypass core assumptions related to cryptocurrency transfers and eliminate attack vectors to any asset transfer.


>> My question here - Is this technique is really secure than the current solutions? Is our funds are safe from hackers and cyberattacks?


Edit:

I gathered few more information where I found a Video by one of the board members of GK8, and one of the founding scientists of Zcash token, Prof. Eran Tromer explained that -

The company’s cold wallet offering has "unidirectional communication" from the wallet. It never accepts raw information back into the wallet from the outside. “This minimizes the attack surface and prevents attacks,” he said.

--> Check this Video by Prof. Eran Tromer


Also, a patent abstract associated with Lamesh described the technology as follows:

“The digital wallet device is electronically disconnected from other digital devices and comprising: a cryptocurrency integrated circuit (IC) that is isolated from any computer interface” … “and a unidirectional communication hardware for sending said transaction to a communication device for broadcasting said transaction via a network.”

Source:
https://cointelegraph.com/news/israeli-startup-that-allows-offline-crypto-transactions-secures-4m
https://en.globes.co.il/en/article-blockchain-deals-without-internet-co-gk8-raises-4m-1001301213
https://www.coindesk.com/gk8-blockchain-wallet-offline
https://www.cryptonewsz.com/israeli-start-up-gk8-develops-offline-wallet-for-cryptocurrency-holds-online-transaction-capability/43398/

[BitcoinPanther]

I wonder how can they transfer data?  Without a means of communication or connection, isn't it impossible to relay data especially on the other part of the world?  Offline means being out in the network.  So how can they transmit data to other country or other places if they are disconnected from others?

[BrewMaster]

the whole article looks like a very vague advertisement of a service and it seems to me like they were paid to publish this!
and to be honest it all seems like over-usage of buzzwords and technobabble to make it look "special" while it looks like (at least to me) that it is what any other hardware wallet does: a "unidirectional connection" where it signs transactions internally then broadcasts the signed result online!

[Decksperiment]

the whole article looks like a very vague advertisement of a service and it seems to me like they were paid to publish this!
and to be honest it all seems like over-usage of buzzwords and technobabble to make it look "special" while it looks like (at least to me) that it is what any other hardware wallet does: a "unidirectional connection" where it signs transactions internally then broadcasts the signed result online!

Yeah its a little bit technical but I found it confusing that they are using the term "offline" when recording transactions to a blockchain which is quite contradictory to the very nature of blockchains which for me is a distributed computing system that are connected via the internet. I think you have a good analogy on using a hardware wallet's "unidirectional connection" feature which "uses only one direction for data communication" and I thought they  associate it with being "offline" maybe just to create hype.

[kryptqnick]

the whole article looks like a very vague advertisement of a service and it seems to me like they were paid to publish this!
and to be honest it all seems like over-usage of buzzwords and technobabble to make it look "special" while it looks like (at least to me) that it is what any other hardware wallet does: a "unidirectional connection" where it signs transactions internally then broadcasts the signed result online!

Yeah its a little bit technical but I found it confusing that they are using the term "offline" when recording transactions to a blockchain which is quite contradictory to the very nature of blockchains which for me is a distributed computing system that are connected via the internet. I think you have a good analogy on using a hardware wallet's "unidirectional connection" feature which "uses only one direction for data communication" and I thought they  associate it with being "offline" maybe just to create hype.

The article sounds like a bunch of words that sound smart but don't make much sense. I know that it's possible to perform transactions offline, there was another project that made it possible to access blockchain through space (with the help of the satellites), for instance. Another thing that could make is not offline, but an off-chain solution, something like the Lightning Network. I think we'll learn soon enough what this is really about, I think the satellite solution is a likely answer, but we'll see. For now, it's just words without particular meaning.

[DarkDays]

Pretty sure you could just transfer private keys, that's a simple ways to transmit value without using the internet.

There are also direct line communications that can use laser to transmit information without ever touching the internet. There are certainly dozens of different ways to transfer BTC without using the internet.

However, if this occurs through a transaction, it will eventually need to be settled on chain.

[1Referee]

Pretty sure you could just transfer private keys, that's a simple ways to transmit value without using the internet.

That's never a good idea, regardless of how 'proven' certain ways of transferring private keys through the air actually are.

Currently we have various mesh networks, where GoTenna even has partnered with BlockStream to utilize their satellites. I put much more confidence in these entities to provide the technology that will allow people to transact without the internet, because they are well funded and pretty far in development already. But then again, more competition is always a good thing.

Another way to transact offline is to use physical coins (e.g. Casascius, BTCC mint, Denarium, Satori). It works just as convenient as physical cash and nothing will ever move on-chain.

[dothebeats]

I am thinking along the lines of telemetry software system for this "unidirectional" transfer system that they are trying to advertise or convey to the public. I'm a fan of such, if we're still in the 1960s-1970s but right now, that's just too slow in today's standards. But if this was embedded in an offline wallet, it could work knowing that there are only a few bytes of data included in sending and receiving transaction data. I'm somewhat confused along the lines of "hot wallet functionalities." If the system is capable of doing such, I'm assuming that they achieved offline transmissions on a long-range at high speeds, but I doubt it--or perhaps I'm getting rusty on my tech knowledge.

[squatter]

My question here - Is this technique is really secure than the current solutions? Is our funds are safe from hackers and cyberattacks?

This might be a paid press release, though there's no disclosure on the Globes article.

It sounds like a variant of a typical offline signing model: Create a secure offline environment where transactions are signed, transfer the signed transaction using non-internet means, then securely push a signed transaction:

To meet this challenge, GK8 experts have developed proprietary cryptographic techniques that enable real-time blockchain transactions of digital assets without any need for an internet connection. These techniques provide a secure environment to sign blockchain transactions and execute automatic reconciliation confidently. The company’s techniques, protected by five registered patents, can bypass core assumptions related to cryptocurrency transfers and eliminate attack vectors to any asset transfer.

These capabilities allowed GK8 to develop the world’s first and only secured cold wallet with hot wallet functionalities.

I'm very skeptical of these claims being thrown around. It sounds like they're using a fairly standard setup -- just like a hardware wallet -- and are throwing patents all over it. This sounds like a load of crap:

Lamesh said, “We found security vulnerabilities in one of the most secured cold wallets in the market. After we saw how easy it was, we understood that hackers will invest millions to steal billions, and we decided to develop a secured end-to-end institutional tool for managing digital assets.”

[Artemis3]

Exactly and doesn't the block stream (core?) Team have a satellite literally already in space to be able to transmit without data?  I could have sworn this happened over a year ago.

This just seems like some weird press release shit going on.

True, you can check it at https://blockstream.com/satellite/. AFAIK there's no cost to use their satellite to broadcast bitcoin transaction, even though you might need few hardware so you can connect to the satellite.

This unfortunately is the big game stopper. "a few hardware" might be receiving data. but sending? This is an order of magnitude more complex, AND expensive, even if they let random people send data as well (which i doubt). And checking their site, there is zero mention of data upload (via antenna), you can send them some text file from the internet for them to broadcast, but that's about it. It IS unidirectional...

I would have tried it if they had chosen a different satellite for South America, instead of something Mexico centered, perhaps something more Brazil centered...

[chaoscoinz]

 It obviously involves offline syncing somehow, maybe an alternative way to sync using phones or some other network of sorts? Possibly a universal ledger that syncs with other chains somehow? Sounds pretty interesting and I can't wait till they unveil exactly how it works. I'm guessing if a startup has figured it out, there are certainly other who are working on similar projects.

[squatter]

Exactly and doesn't the block stream (core?) Team have a satellite literally already in space to be able to transmit without data?  I could have sworn this happened over a year ago.

True, you can check it at https://blockstream.com/satellite/. AFAIK there's no cost to use their satellite to broadcast bitcoin transaction, even though you might need few hardware so you can connect to the satellite.

The minimum bid to send data is 50 mSat/byte.

It's pretty gimmicky since no one is really sending data to the satellite. You upload or type the message/transaction here using a regular internet browser. Once you pay, Blockstream adds your transaction to the satellite queue to be broadcasted.

[bitart]

Pure marketing bullshit (IMHO), they know that if they do the first step in this blockchain security solution thing, the competitors would always be the 2nd or 3rd solution on the market...
So despite of that possibly they don't have a working solution for the problem, they can communicate like they already have and people will believe it...
Also, if they can make contracts beforehand, they can secure their position on the market...
The communication is a bit like this: OK, we have the solution, we have patients to protect it, so you have to make business with us, because the others won't be able to serve you with this kind of solution... we're not ready yet but as soon as we are, you'll be the first who can use this revolutionary thing, etc, bla-bla...

Or, it's also possible that they will create a centralized database and fill it with pre-generated public/private keys, and they will fund these addresses with bitcoin.
After, when a customer (because they are a bank and they have customers) wants to buy bitcoin, they just assign the proper public keys to the customer to show that he has the bitcoin. Probably they won't let the customer to move the funds, they just let them sell the bitcoins (meaning that they will cancel the assignment of the public key and the customer). This is possible because they are trusted by the customers, so they can run a centralized system (because of the trust). Bitcoin is a working system were the trust is excluded from the system so for those who really understand what bitcoin (and the blockchain system) is about, these kind of 3rd parties are just useless things...

[Micerker]

I regularly read blockchain-related technology news and realise that this is one of the security features for your assets. However, offline transactions can still cause errors, and this is what worries me, we still need to verify the absolute value of the offline exchange. However, with offline, you can ensure the safety of all Bitcoin and Altcoins.

[Zionatin]

I don't see the point in having an offline system when basically everything today is online. What are we going back to the stone age? Even the poorest of countries still has the technology and some access to the internet.
The cost to buy a cheap phone and some airtime to go online is much much cheaper and much easier than opening a bank account. You can buy a phone and add airtime and make crypto transactions within a few minutes of your time. Banking would take forever and carry heavy fees. Heavy banking fees are what pusher poorer families away from using banks but now they can get their own bank and they have the power. All thanks to crypto.

[Henri Cartier]

Thanks everyone for explaining your thoughts on this. I felt few information are missing in this post. I gathered few more information where I found a Video by one of the board members of GK8, and one of the founding scientists of Zcash token, Prof. Eran Tromer explained that -

The company’s cold wallet offering has "unidirectional communication" from the wallet. It never accepts raw information back into the wallet from the outside. “This minimizes the attack surface and prevents attacks,” he said.

--> Check this Video by Prof. Eran Tromer


Also, a patent abstract associated with Lamesh described the technology as follows:

“The digital wallet device is electronically disconnected from other digital devices and comprising: a cryptocurrency integrated circuit (IC) that is isolated from any computer interface” … “and a unidirectional communication hardware for sending said transaction to a communication device for broadcasting said transaction via a network.”

Source: https://www.coindesk.com/gk8-blockchain-wallet-offline
https://www.cryptonewsz.com/israeli-start-up-gk8-develops-offline-wallet-for-cryptocurrency-holds-online-transaction-capability/43398/

[franky1]

“The digital wallet device is electronically disconnected from other digital devices and comprising: a cryptocurrency integrated circuit (IC) that is isolated from any computer interface” … “and a unidirectional communication hardware for sending said transaction to a communication device for broadcasting said transaction via a network.”

offline signing. then carrier pigeon to another location to broadcast

[pooya87]

i would never even go near something like this simply because they are obviously lying about a ton of things and exaggerating what their product does. an honest company would simply first acknowledge the previous works and the already existing tools (for example in this case the hardware wallets that already exist) and then explains why their product is any different from others. but they chose the lying route saying their crap is "world's first" whereas it is repetition of what was already created.
maybe they are doing it this way because they are afraid they might get sued soon for ripping off other patents.

[FlightyPouch]

I regularly read blockchain-related technology news and realise that this is one of the security features for your assets. However, offline transactions can still cause errors, and this is what worries me, we still need to verify the absolute value of the offline exchange. However, with offline, you can ensure the safety of all Bitcoin and Altcoins.

Well, the idea of an offline transaction is quite more concerning than the safety of bitcoin and other crypto currencies. I don't even know how will that work but I don't see that happening in the future. It will not cause errors, it will not worry you since this will not be a thing. Or even if it is a thing, I don't think people will like this.

[Tylev]

I regularly read blockchain-related technology news and realise that this is one of the security features for your assets. However, offline transactions can still cause errors, and this is what worries me, we still need to verify the absolute value of the offline exchange. However, with offline, you can ensure the safety of all Bitcoin and Altcoins.

In any case, this is all very interesting information that deserves close attention. Assuming that such a technical solution is possible, then this can produce a new wave of the technical revolution in cryptocurrency. After all, hackers and various fraudsters this year alone stole more than $ 4.3 billion in cryptocurrency holders. If such a technical solution is possible that will increase the security of cryptocurrency so much, this will completely change the attitude towards it for the better. Cryptocurrency has only just begun to develop, and it is still largely imperfect. Therefore, I believe that new technical solutions will inevitably arise.