If there is one parameter that is too often overlooked in the cryptocurrency sector, it is that of the effective level of training of its users. Because the latter are most of the time left to their own devices in this digital journey strewn with pitfalls, between targeted attacks and incomprehensible features for a non-developer. All mixed with a legitimate distrust vis-à-vis anything that proposes to “simplify” this situation.
A solitude that is nevertheless necessary if one considers the principle of self-preservation linked to this decentralized digital economy. Because the goal is to be able to do without third-party structures such as banks to hold digital funds and protect them from disasters such as the collapse of the centralized FTX platform. And in this area, the best possible solution is still to have a hardware wallet, the leader of which remains the French company Ledger. However, its latest feature “Recover” does not pass with the crypto community.
Ledger Recover – Simplify private key recovery
The Ledger company is the undisputed leader in the field of hardware wallets dedicated to cryptocurrencies. Because these little boxes allow you to securely protect the private keys related to these digital holdings. A “cold” storage system – self-hosted – without any Internet connection to differentiate from much more sensitive “hot” wallets.
Because the real risk is leak or lose this seed phrase (seed phrase) and with it access to associated cryptocurrencies. A problem at the origin of many disappointments, because once this unique private key is compromised, it becomes impossible to interact with the funds concerned. These are lost forever, even if they remain visible on the blockchain. Reason Why Ledger Wallet Just Offered a new feature called “Recover”.
« If you choose to subscribe, Ledger Recover encrypts a version of your private key and splits it into three shards (using Shamir’s secret share) – all of this happens on the Secure Element chip, so your passphrase secret recovery is not in danger. These encrypted fragments are stored by 3 different parties on secure hardware security modules. »
Ledger Recover – “So the seed can leave the device?” »
Good news for dizzy Ledger wallet users who won’t have to worry about storing that phrase off-line anymore. But at the same time, this announced simplification is really not to everyone’s taste. Indeed, the announcement of this “Recover” option has triggered a wave of anger far beyond the ranks of Ledger wallet users. And the reason is as simple as this assertion by Changpeng Zhao (CZ), founder of the Binance platform.
« Seed (seed) can leave the device now? Sounds like a different direction from “your keys never leave the device«
Indeed, this Recover option proposes to encrypt and divide the private keys into three separate fragments. But the problem lies elsewhere, because the procedure then involves storage “by 3 different parts. » And the fact that this is done using “secure hardware security modules” does not change the problem stated just before. Because in fact – and even encrypted, cut up or even better – users’ private keys do leave the hardware wallet where they were supposed to stay safe.
Because ultimately the very statement of this new functionality is worrying since it is a question of being able to regain access to his cryptocurrency portfolio without his seed phrase. Indeed, as the Bitcoin specialist explains Jan Wustenfeld, doubt is now allowed since “this software update allows fragments to leave the hardware wallet. And if so, who can guarantee “that a malicious software update won’t expose your private keys to a hot device?” »
Ledger Recover – An optional option with mandatory KYC
The question needs to be asked. Especially considering that the Ledger company has already been the victim of major data breaches several times in the past. But don’t worry because this new Recover option is optional, since paid (€9.99/month). And each subscription allows you to save a single secret recovery phrase… passing a mandatory identity verification (KYC) with Ledger in order to activate it. Because it “allows you to be the only person who can recover access to the wallet. »
« It is your responsibility to store your secret recovery phrase. While this gives you all the benefits that come with personal custody, and full control over your assets, it also makes you fully responsible for their security. Ledger Recover was developed for users who want to add an extra layer of protection, in case something goes wrong with their recovery passphrase. »
Ledger
Suffice to say that the controversy triggered around this service is not over. Because its effective implementation flirts with many borders which nevertheless make it possible to delimit the decentralized sector cryptocurrencies. A codified environment in which Ledger hardware wallets have until now been the main defenders. But by wanting to simplify too much, isn’t there the risk of sinking into another economic model that is much too close to the CeFi? To meditate…
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