Wallet Cryptography 101. Steve Swing Substratum

Transcription

1 Wallet Cryptography 101 Steve Swing Substratum

2 Wallets Cold Storage

3 A_paper_printable_Bitcoin_wallet_consisting_of_one_bitcoin_address_for_receiving_and_the_ corresponding_private_key_for_spending.png Wallets Paper

4 Wallets Mycelium Entropy

5 Wallets Ledger Nano S

6 Wallets LedgerBlue

7 Wallets Trezor

8 Wallets KeepKey

9 Software Wallets Bisq (Bitcoin Square)

10 Wallets Electrum

11 Mobile Wallets

12 Wallets A cryptocurrency wallet does not store coins or tokens like a fiat currency wallet or coin purse Cryptocurrency is stored in transactions or in SmartContracts on the blockchain Wallets are a mechanism to keep track of private and public keys Privacy and secrecy of private keys is critical to avoid loss

13 More Like Debit Card Just as debit cards are a means to access fiat currency in an electronic account Cryptocurrency wallets provide access to coins and tokens for transactions You must prove you have the private key

14 Wallets Downsides Paper - at risk for fire, flood, deterioration Brain - at risk due to death or mental incapacitation Software - at risk via unauthorized electronic access Hardware - recovery mnemonic phrase is lost or leaked

15 Terminology Public & Private Key Pairs Private keys decrypt data or messages encrypted with the corresponding public key Public keys verify signatures made by signing data with the corresponding private key HMAC - Hash-based Message Authentication Code SHA - Secure Hashing Algorithm SHA-1, SHA-2, SHA-3, SHA-256, SHA-384, SHA-512 (bits)

16 Bitcoin Improvement Proposals (BIP) BIP Hierarchical Deterministic Wallets BIP Passphrase-protected private key BIP Mnemonic code for generating deterministic keys BIP Multi-Account Hierarchy for Deterministic Wallets

17 BIP32 - Hierarchical Deterministic Wallets

18 BIP39 - Mnemonic Phrase Encodes ENTropy in multiples of 32 bits ENT bits Checksum (CS) = ENT/32 Mnemonic Sentence (MS) = (ENT + CS) / 11 ENT CS ENT+CS MS ENT+CS grouped into 11-bit groups encoding a number serving as an index into a wordlist Wordlists: bip-0039/bip-0039-wordlists.md

19 BIP39 Visualized Mnemonic Phrase (24 words) asset nose alarm toward marriage skull hole shoe drive feel trap joke vicious hollow trumpet case clap bullet bag merge proud cup mimic outside

20 BIP39 Visualized 256 bits of entropy 0db2cc b2e33434a9b9d3c2f38d9fa611929c3c44645bacc6b bits checksum 264 bits

21 3 nybbles 0db cc b e a b9d c f d9f a c c bac c6b ec BIP39 Visualized

22 BIP39 Visualized 12-bits }22 rows (12 * 22 = 264)

23 BIP39 Visualized 11-bits }24 rows (11 * 24 = 264)

24 BIP39 Visualized 11-bits

25 BIP39 Visualized 11-bits index

26 BIP39 Visualized 11-bits index word asset nose alarm toward marriage skull hole shoe drive feel trap joke vicious hollow trumpet case clap bullet bag merge proud cup mimic outside

27 BIP44 - Multi-Account Hierarchy for Deterministic Wallets Defines 5 levels in BIP32 Path m / purpose' / coin_type' / account' / change / address_index ' (prime) indicates a hardened derivation path (0x ) purpose e.g. 44 (0x C) coin type e.g. ETH = 60' (see blob/master/slip-0044.md for full list) note 60 (0x C) account from 0 to n (hardened) (0x xFFFFFFFF) change 0 = external, 1 = internal (applies to BTC et. al.) address index from 0 to k (k = ) (0x x7FFFFFFF)

28 MyEtherWallet

29 MyEtherWallet

30 MyEtherWallet Purpose

31 MyEtherWallet Coin Type

32 MyEtherWallet Account

33 MetaMask

34 Wallet Safety Internet Safety Applies Extreme care of password hygiene, privacy, and security Unique passwords MFA or 2FA Social engineering exploits, Phishing, Scams, Nefarious trickery and chicanery

35 Wallet Safety Keep software up-to-date OS Browser Security patches Shared access with family and friends

36 Wallet Safety Keep your mnemonic recovery phrase secret Don't photograph your mnemonic recovery phrase Store your mnemonic recovery phrase carefully Fade proof ink Waterproof Fireproof Insect proof Test your mnemonic recovery phrase

37 Offline Usage Airgapped Hardware USB/Flash/Memory card storage Docker Image Virtual machine Electron App Local stand-alone html pages

38 Offline Examples Docker: MyEtherWallet Electron: BIP39 Page

39 Diversification Multiple hardware wallets Multiple hardware wallet initializations Maintain assets on several different wallet types

40 Considerations Survivor access Leave instructions in safe deposit box On file with estate attorney Keep access instructions up to date when things change

41 Ohio Linux Fest 2pm Saturday 10/13/2018