Open-source Web3 identity provider, .bit, has recently announced the launch of a new feature, .bit Alias, to help reduce the risks associated with sending assets using mainstream crypto wallets and exchanges.
The company had recently warned users about the potential risks surrounding the usage of decentralized identifiers for crypto asset transactions.
A decentralized identifier (DID) serves as a unique representation of an asset owner’s address on a blockchain, simplifying the process of asset transfers by eliminating the need for long and complicated addresses. By using a DID, tokens or assets can be sent to a wallet or exchange, which can then use the identifier to authenticate and verify the data of the token or asset before sending a response back.
.bit identified a risk associated with the application programming interface (API) used by wallets or exchanges.
The .bit Alias feature helps to enhance the security and user-friendliness of Web3 by converting complex blockchain addresses into simpler and more readable .bit accounts, improving convenience. This feature triggers double verification when transferring funds, avoiding risks such as hacker attacks, internal manipulation, program errors, outdated data, and expired DID.
To use the feature, the asset receiver provides the address and the corresponding .bit Alias to the sender, and the wallet or exchange initiates a .bit Alias Lookup request to the application programming interface (API) service. Once the result is found, the user is prompted to complete the alias of the receiving address, and the wallet or exchange compares the filled-in content with the result of the query. The user can only complete the transfer if the two exactly match, ensuring the security of transfers.
To further improve security, .bit recommends that wallets or exchanges disable the function of directly sending or exchanging assets using DIDs and instead use solutions such as .bit Alias.
Asset recipients are also advised to set a .bit Alias for their own address and provide both the blockchain address and the corresponding .bit Alias to the sender when receiving assets. Asset senders should avoid direct assets transfers using DIDs and use a wallet/exchange that has upgraded its security level for its users’ assets.
The .bit Alias feature is compatible with multiple chains and supports various asymmetric encryption algorithms for signature verification, providing more possibilities based on sovereign identity. With the launch of this powerful tool, .bit is further enhancing the security and user-friendliness of Web3.