New wallet service
Crypto asset (virtual currency) wallet company Ledger announced on the 16th that it will soon launch a new product, Ledger Recover.
Exciting update, Ledger has a new product, Ledger Recover, that’s launching soon: https://t.co/nT1VHnnSYz
—Ledger (@Ledger) May 16, 2023
What is a wallet
An electronic wallet dedicated to digital assets such as virtual currency. It is mainly used to store digital assets.
This product is a service that allows users to choose whether or not to use it. Although it is a service used by users who want to back up their secret recovery phrases (hereafter referred to as recovery phrases), there have been many criticisms and concerns regarding the provision of this product.
Recovery phrases are also called seed phrases or mnemonic phrases, and are essential for using virtual currency wallets. A recovery phrase consists of 12 or 24 words and is used to restore a wallet and access the cryptocurrency associated with the wallet.
Ledger Recover is a service that allows you to divide your recovery phrase into three parts, encrypt them, and have them stored by third-party companies such as Ledger. The tweet explains that the private key is divided into three parts, but the official website states that the recovery phrase is divided into three parts. This service, which is classified as “social recovery,” is originally intended to enhance user convenience and safety.
The service was not first announced on the 16th, and the official website has already opened a ‘Frequently Asked Questions’ page. It is also written that the device will be limited from now on and will be soft-launched soon.
voice of criticism
Along with the announcement, the service received a lot of criticism and concerns. For example, Mudit Gupta, chief information security officer at Polygon Labs, which develops the Polygon (MATIC) protocol, said:
Splitting the recovery phrase (“key” in tweets) into three pieces is not a problem and I think it’s a good idea.
The problem this time is that each of the three companies with the recovery phrases can recover the keys.
The problem here is not splitting the key in 3 parts. That’s actually good! I may or may not be doing that personally as well 🙂
The problem here is that the encrypted keys parts are sent to 3 corporations and they can reconstruct your keys.
—Mudit Gupta (@Mudit__Gupta) May 16, 2023
Criticisms and concerns have been raised in media other than Twitter, but Ledger emphasizes that it is a service that users can choose to use. As Ledger explained to The Block about the issue of allowing a third party to decrypt the recovery phrase:
The three-part seed phrase can only be decrypted by Ledger devices after the user authenticates their identity.
The company that holds the seed phrase never has access to the user’s seed phrase.
In addition, there were voices of criticism and concerns about the fact that ID authentication is required and the seed phrase is linked to the ID card.
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