The mnemonic wallet is no longer suitable for today's market environment
Original author: wang fuqiang
From: some information & NBSP;
The article is based on a speech by wang fuqiang, founder of BitMesh exchange, about the status of bitcoin wallets.
Now both personal wallets and corporate asset management wallets are based on mnemonic schemes. However, the security of bitcoin assets lies in the confidentiality of its encryption system. The premise of security is to keep mnemonic words or private keys in everyone's possession. This creates a cumbersome use, if the user once lost mnemonic, all the money lost. We think the current bitcoin wallet problem is that it doesn't perfectly resolve the conflict between security and ease of use.
Let's compare the different wallet schemes available:
Single private key wallet
In a typical bitcoin wallet, 12 words are used to control the money in the wallet, or mnemonic to keep the money.
If the user loses the word, all funds and wallet related content will be completely lost. To reduce the risk of loss, many people write words in multiple places on paper, which increases the risk of leaking their private keys. Another way is to keep mnemonic words separately, so that if a word is lost in one part, all assets are lost completely.
This is also the most direct reason for the frequent theft and loss of blockchain assets. Billions of dollars have been lost or stolen since the birth of bitcoin, and the amount is increasing year by year.
P2SH multiple signature
P2SH multi-signature scheme allows a total of m private keys of n (n< M) signature can unlock the transaction. The idea of multi-signature solution for fund management is to put more locks on the wallet. Different from locking one wallet, multi-signature wallet will create more locks and corresponding private keys, which are kept by different participants. Even the loss or theft of a private key is not enough to threaten the security of the entire wallet.
But the scheme changes the wallet protocol so that signed documents take up more content and transactions are more expensive. Address format, lack of privacy.
At the technical level, the implementation of multiple signatures needs to make changes to the bottom of the block chain, and different block chains need to be implemented separately, so the generic type is not strong. Multiple signatures limit the number of participants, support a maximum of (8/15) split, and more than 15 can be problematic.
4S secret key sharing scheme
This scheme is not completely touched, because it is too complicated to use. It is not a signature scheme, but a private key split management scheme.
The 4S secret key sharing scheme has several features that make it a less than ideal wallet scheme.
First of all, the distribution of the private key is the responsibility of the middle man. When the private key is generated, the middle man needs to divide the private key into several parts and send them to different holders. In addition, in the 4S scheme, different private key fragments need to be synthesized into a complete private key to complete the signature.
Threshold is the Threshold scheme
Threshold scheme is different from other one of the main features of the purse, it is the private key generation process is decentralized, threshold distributed to the private key generation and distribution, to ensure the integrity of the private key in the first place does not exist, through calculation, the private key is generated in the form of fragments of different responsibility and stored in the device. It is also not necessary to compose a complete private key at a later signature stage. Fundamentally eliminate the online signature and lead to the private key exposure.
The threshold's interactive multi-party computing signature (IMPC) avoids private key exposure and ensures that there is no security risk even if the wallet is always online, so that the wallet does not have to be offline for security reasons. It is a perfect application scenario for businesses that need to deal with coin withdrawal frequently. It can be done efficiently and securely, so there is no need for exchanges to keep wallets offline all the time for the security of money.
So there is no difference between cold and hot in the threshold, cold and hot these two concepts are in the absence of a better security solution to put forward a concept, in order to ensure the absolute security of funds to put forward the cold and hot wallet such a concept.
The threshold scheme has the following characteristics:
First, the private key does not exist. At the moment the wallet is created, the private key is divided into fragments and stored on the device of the participant and the holder, and it is not necessary to put the private key into a complete form at any stage of the wallet's existence.
Second, enough privacy. The threshold signature doesn't touch the bottom of the block chain, so its address format is guaranteed to be exactly the same as the normal address format. Outsiders have no way of knowing exactly how many pieces of private keys the wallet has, who signs them and who owns them.
Third, wallets are lightweight. It does not lead to an increase in transaction costs, even though the private key is divided into dozens and hundreds of pieces and the transaction costs are exactly the same as the single private key wallet.
Fourth, threshold signals-based wallets are versatile and can be deployed on different blockchains and different asset protocols.
The threshold has some of the above advantages, but it is not a panacea. While recognizing the advantages of threshold schemes, we should also pay attention to risks, because this technology is relatively new and relevant researches are very few. We have counted no more than 10 papers related to threshold schemes.
Threshold security has two risks:
First, the premise of Threshold security is that its private key fragment should be maintained above the Threshold. When the existing fragment is less than the Threshold due to the loss of the private key fragment, the wallet fund cannot be recovered.
The second risk is internal attack. It is said that a thief is hard to prevent. In multiple wallets created based on thresholds, if the private key holders are familiar with or have interests in each other, they may collude to commit fraud. If there is an interest relationship between third party private key custodians, it will also lead to the risk of collusion.
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