February 11, 2019
Secure and Convenient Current Accounts on BSV – Visions for Bitcoin from Dr Craig S Wright
Several issues can arise from storing information, such as the private key, which gives access to a user’s funds: a trusted third party may cheat or suffer from an attack on its database, which we have seen in the case of Mt. Gox but also in numerous other scenarios and industries where valuable information was compromised; equally damaging, by storing the private key himself, a user may not be able to keep it hidden from unauthorised access in a convenient yet secure way. As a result, the cost of managing and insuring funds reaches a level of displeasing heights.
The solution, explained by nChain’s Chief Scientist in his sixth Medium post of Bitcoin (SV) use cases “Secure wallet systems,” lies in a signature scheme which allows businesses and users to store and access funds both securely and conveniently—where:
- a third party need not be trusted;
- no unauthorised party can view or manipulate valuable data on users’ funds; and
- outage of the third party or a user’s device does not influence the ability to access funds.
The signature scheme is a product of nChain’s patent innovations for the Secure Split Key technique and Deterministic Key Generation, and allows wallet providers, banks, exchanges, and other services to provide an account-management system that benefits from a combination of attributes:
- Safety: A newly generated private key for funds is split into several shares, which are stored across the service provider, the user’s device, and a remote safe location. The compromise of one such source, for example the service provider, does not provide access to the funds.
- Accessibility: The number of storage facilities (parties) required for the transmission of shares can be personalised according to different security needs. In a 2-of-3 scheme, for example, the outage of the service provider does not affect the accessibility of the user’s funds, since access is still granted through the share stored at the remote safe location.
- Authenticity and privacy: A common secret is formed amongst selected parties for safely storing the different shares, where merely public information is transmitted to generate the secret, and digital signatures authenticate transactions for authorised access. Doing so means that potential attackers are prohibited from successfully imitating points of access, even if they manage to gain parts of a common secret. Privacy is maintained by giving complete control to the user.
- Convenience: Shares of the private key can be stored amongst users’ devices and platforms, but also spread across users themselves. The benefit lies in readily available funds without compromising on aspects of security, as the locations of the shares remain unknown even to the ones who possess them—making it practically infeasible for an attack to take place. And the user experience is kept in check by safely storing funds at rest and allowing to personalise access to funds through, for example, a user’s set daily limits, PIN, or biometric smart card—set according to the user’s preferences and needs.
The need for private, secure, yet user-friendly solutions that meet modern application standards in ease of use and accessibility has led us to build a key part of nChain’s Metanet project, where device and web information can be stored and organised on the Bitcoin SV blockchain. An integrated BSV wallet allows for direct and efficient monetisation, seamlessly protecting and quantifying the value of our data (also see previous posts for more information here).
Gain more insights into building the account-management system powered by BSV and make it your business by reading Craig Wright’s entry here.
Or get in touch with nChain Professional Services here.