NFC or Near Field Communication technology is a set of protocols that can be used to establish communications between two devices when they are brought near to each other. It enables contactless communications using a radio frequency field and can operate within a range of around 4 cm. The two communicating devices usually involved include a stationary NFC reader and a portable NFC enabled smart card, mobile phone, wristband, etc. NFC has been widely used in payment cards, transportation cards, smart phones, mobile wallets, and as wristbands in the healthcare industry. It has especially become very popular for mobile payments and resulted in the growth of the FinTech industry. Information about NFC based credit cards can be stored in digital wallets and used to make payments at retail stores.
Since NFC cards can store and communicate data, there is no reason why should they be restricted to store credit card data. Using the same principles, NFC cards could be used to store any kind of personal or sensitive data. Also, with more and more people getting involved in the cryptocurrencies market, and some retailers already accepting them, there is a rising demand for NFC Cards that can be used to provide secure storage for crypto currencies. These cards can also be integrated with wallet applications to provide an easily accessible yet secure digital vault for data protection of personal information like passwords, PINs, answers to security questions and crypto assets that can be accessed from mobile devices.
A wallet for crypto currencies is basically similar to a bank account. It allows you to receive/buy crypto coins, store them and/or transfer them to others. Since cryptocurrency transactions are usually dependent on cryptographic private keys used for encryption, technically the wallet stores the private key that can be used for transactions. Crypto wallets can be categorized into various types like hardware wallets, desktop wallets, mobile wallets, etc. Hardware wallets are considered to be the most secure and usually involve a physical device that can store private keys and public addresses. Since most users are already familiar with the payment card interface for financial transactions, credit card-like NFC cards that can be used to store crypto currencies are being introduced to serve as hardware wallets. Corresponding mobile apps released by the providers allow these cards to be used. NFC hardware wallets thus offer the following advantages to its users:
- The NFC card itself is offline in this case and as such it provides cold storage for the coins and data and is more secure. It’s a passive device where the chip cannot interact with the environment.
- Some NFC wallets can be used to store personal sensitive information like passwords, PINs, etc., which are otherwise difficult to remember.
- These wallets allow you to store and trade in multiple digital currencies.
- Because of the NFC technology being used in the background they can be used as contactless cards, which are easy to use.
- The interface is very similar to credit cards and corresponding digital wallet apps which are already very popular.
- They are robust and can be used like any other everyday payment cards.
- Unlike other hardware wallets, some NFC card wallets do not need to be charged.
- They are easy to procure online and do not need registration formalities like most credit cards.
CoolWallet S, NFC Wallet card and Sugi Wallet are examples of providers who offer NFC cards as hardware cold storage cards for crypto coins and in some cases for personal sensitive data. Thus, these cards can provide a convenient alternative to other hardware wallets that are usually more bulky than a card and not designed for contactless communication.
About the Author:
David Smith is a cryptographer with 12 years of experience in both the public and private sectors. He is currently working on his second startup (currently in stealth mode) that will track and interpret the use of contactless payments in the Greater China region. His expertise includes: system design and implementation with contact and contactless smart cards, smart card personalization, mobile payments, and general knowledge and experience with APAC market trends and consumer preferences.
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