One of the most popular cryptocurrency hardware wallets is about to become more secure. Trezor has announced that it is beta testing a security standard known as Shamir Backup. This security features specifically addresses a headache that many hardware wallet users experience: protecting the recovery seed. With Shamir Backup the goal is to eliminate the security risks that are inherent with recovery seeds, namely loss or theft.
The Recovery Seed for Crypto Hardware Wallets
A recovery seed for a hardware wallet is literally the keys to your cryptocurrency kingdom. This list of seemingly random words is what will allow you to recover the contents of your Trezor wallet in the event that the device is lost or becomes damaged. Without a recovery seed it would be impossible for you to regain access to your tokens.
Recovery seeds have long been the standard for Trezor and other hardware wallets like the Nano. These seeds ship with the wallet and users are encouraged to write them down on their own piece of paper to create a physical backup. This copy of the seed can then be secured according to the user’s own preference.
Recovery seeds are very difficult to memorize unless you have a photographic memory. They are designed to be that way so that someone can’t just see your seed, commit it to memory, and have access to your crypto.
Recovery Seed Security Flaws
Even if you are not someone that is invested in cryptocurrency you can probably spot a couple of serious security flaws with recovery seeds. These weaknesses have caused people to lose large sums of crypto, and that means losing money.
The first problem is that you can lose your paper backup of the recovery seed. We have heard from people who have washed it after leaving it in a pair of jeans, thrown it away on accident, or simply misplaced it where it was likely thrown away as trash. This actually happens more than you would think.
The other problem is that someone can simply steal the recovery seed. In an instant the thief has access to your crypto wallet. All they have to do is get their hands on a Trezor wallet, provide the recovery seed, and your cryptocurrency is gone.
When this happens to someone the first reaction is usually disbelief. How could this happen to me? Then there is anger, either at oneself or at the thief who stole the recovery seed. Finally there is regret that the recovery seed wasn’t given better protection, and maybe disappointment that betting security methods were not available.
Shamir Backup – A Better Way to Protect Your Recovery Seed
Some hardware wallet users have used what is known as a sharing scheme to protect their recovery seed. This involves breaking the recovery seed up into parts and sharing it with trusted friends or family. For example, Friend A would have the first four words of the seed, Family B the second four, and so on. The idea here is that no one can steal the recovery seed without tracking down all the parts and assembling them in the right order.
Some people even make it more difficult by rearranging the order of some series of words when they split it up, but this can create even more confusion when you try to recall the seed. At any rate, this is perhaps a better method of protecting the recovery seed than writing it down on paper and storing it somewhere.
Again, there are potential problems with this method. The friend or family member that has the seed in their possession can pass away. Someone can steal it from them. You might even have an argument with the person that causes them to destroy the seed in anger.
Nevertheless, a threshold secret sharing scheme to protect the recovery seed for your wallet is an effective method of security. Shamir Backup is a secret sharing scheme that is getting positive reviews for its ability to help users secure their recovery seeds.
How Shamir Secret Sharing Works
Shamir Backup uses a complex mathematical scheme involving polynomials to provide better security for the recovery seed. The basic idea behind the premise is that even if a thief manages to steal one part of your recovery seed that has been split into parts, they are no better off than having none of the parts.
Shamir Secret Sharing was created by Adi Shamir. It is an algorithm in cryptography that is a form of secret sharing where the parts of a secret are shared among a group of participants. In this case the secret is the recovery seed. A minimum number of parts is required to reconstruct the secret, but in a threshold scheme like Shamir uses this number is less than the total number of parts.
If all this sounds complicated that’s because it is. The good news is that Trezor is making its new hardware wallets compatible with the Shamir algorithm. The process is currently in beta testing right now and is expected to be available to users very soon.
Basically, the new wallets will assist users in the implementation of a Shamir Sharing Scheme that will provide better protection for recovery seeds. Those who are interested can read all about it on the Trezor website, and you can even sign up to be a beta tester.
Once again Trezor is showing itself to be a leader when it comes to the design of cryptocurrency hardware wallets. If you don’t currently own one of these wallets perhaps now is the time to consider buying one.