How to protect your crypto for generations to come
A major hardware wallet provider offers a cutting-edge way of backing up cryptocurrency that it says is even safer than a recovery seed.685 Total views 3 Total shares Listen to article 0:00
With the value of major cryptocurrencies surging in recent months, knowing how to keep private keys safe has never been more important.
We’ve all seen the horror stories that arise when all-important recovery seeds are lost, destroyed or inaccessible — or worse, stolen by a malicious actor. The consequences can be devastating, with life savings lost in the blink of an eye.
But Trezor says it doesn’t have to be this way, and has come up with a novel way of protecting crypto for years to come… with safeguards in place that reduce the likelihood of security being compromised by a hacker.
How Shamir Backup works
Shamir Backup splits a seed into multiple parts known as recovery shares — kind of like the Horcruxes seen in the Harry Potter series.
Users can create up to 16 recovery shares — and each of them offer sequences of 20 words. From there, they need to decide how many recovery shares will need to be combined in order to unlock access to crypto.
For example, one user may require two of their three recovery shares to be brought together to generate their keys. Another may choose to exceed the threshold of three of five recovery shares, while someone else may require five of eight. The only important thing to remember is that wallets are unrecoverable if the required threshold cannot be met.
Trezor says this approach eliminates a single point of failure — and crucially, funds can still be retrieved if some of these recovery shares go missing. Users have the freedom to distribute these shares in a range of safe places — such as with lawyers and loved ones, or in safes and storage facilities.
Even if a malicious actor manages to obtain one recovery share, they won’t be able to steal anything because they lack the threshold to generate the keys. This also eliminates the risk of a trusted individual taking it upon themselves to access the crypto.More insights from TREZOR here
A compelling advantage of Shamir Backup lies in how it could enable crypto investors to have an inheritance plan for when they die. The location of recovery shares could be disclosed in a will, ensuring digital assets can be passed on to their next of kin.
Better than a single seed
Trezor says Shamir Backup offers a number of perks compared with a single recovery seed backup that extend beyond those listed above. It’s based on a cryptographic algorithm that was created by Adi Shamir.
Crucially, its approach uses a different wordlist to BIP-39 recovery seeds. Recovery shares are also much likely to be longer than single backups, which tend to only be 12, 18 or 24 words long.
Even knowing just a few words from a traditional 12-word seed phrase makes it possible to brute-force attack the rest — and according to Trezor, this is why splitting one 24-word seed into multiple pieces can be so dangerous.
Shamir Backup is currently an exclusive feature for the Trezor Model T, a hardware wallet that supports more than 1,000 coins… including household names such as Bitcoin, Ethereum and Litecoin.
The resilient device can operate in temperatures ranging from -20°C to +60°C, comes equipped with a bright color LCD, and can hook up to mobile phones and computers through USB-C connectivity.
As early Bitcoin adopters count the cost of losing their private keys — with hard drives languishing in landfills and programmers struggling to remember the password to disks storing crypto worth hundreds of millions of dollars — Shamir Backup could be the silver bullet that enables investors to protect their crypto for generations to come.Learn more about Trezor
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