If you’re worried about losing your private keys, try tapping your friends as a recovery network, one startup says.
Vault12, backed by Winklevoss Capital, True Ventures, Naval Ravikant and Data Collective, went live on Wednesday, offering a new passkey system for crypto-holders to secure their digital assets.
The app uses a cryptographic technique called Shamir’s Secret Sharing, developed by legendary Israeli cryptographer Adi Shamir. Customers select a group of individuals, referred to as “guardians,” who each possess parts of users’ seed phrases (the multi-word passwords crypto wallets require for asset access). If app-users lose access to their crypto assets, they can combine portions of their guardians’ keys to recover their funds. Users can pay guardians ether to protect their key portions.
Chief crypto officer Wasim Ahmad told CoinDesk Vault12 has no access to users’ seed phrases and assets. The app is “decentralized”:
“It’s all on people’s individual phones and their individual devices and it doesn’t pass through any servers, … the company doesn’t have any ability to see any of that. From an external risk perspective, that’s a big deal.”
Co-founder and CEO Max Skibinksy described the social recovery idea as a step-change in password management.
“Every hardware and mobile wallet to a degree passes the final security step [to] users,” he said. “They say, ‘well we have this very secure way of operating the wallet but please keep this recovery phrase or crypto key or whatever’ … [you] own the job of keeping it safe.”
Instead, with Vault12, the recovery function sits with a group of friends.
The concept isn’t new. Mobile phone manufacturer HTC has a similar social key recovery mechanism with its Exodus phone line, though users cannot pay others to hang onto their passphrases.
Vault12, which has operated in beta, will support Windows and MacOS operating systems.
Vault12’s app lets guardians set prices, Skibinsky said. One user could act as a guardian for $10 per month, while another might charge higher prices but offer more exclusive services. He added:
“We provided this mechanism in the app that owners … add ethereum to [their] Vault and this ethereum will go in a smart contract that will monthly pay out guardians the price that the guardian set for their services, and this price will be visible to both [parties] when you set up the Vault.”
The launch product is aimed at individuals setting up their own networks, but Skibinsky said future versions would be aimed professional user-groups, including legal firms or employers.This should help reassure people with less experience in the space to hold crypto assets, he said.
Ahmad said users can replace their guardians at any point.
“If someone keeps losing their phone, the app will tell you ‘oh this person’s offline,’ … and you can say ‘well maybe I should swap them out for someone else,’” he said. “The app will handle all of those kinds of scenarios … it’ll notify you about the health of your guardians [and] about the health of your assets.”
Users can configure their systems to ensure geographical separation for their guardians and set up multiple backup devices to act as a contingency in case any guardians are unavailable, or to protect against natural disasters, Skibinsky said.
Vault12 team image courtesy Vault12