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20 sats \ 6 replies \ @moneyball 17 May 2023 \ parent \ on: Seed Phrases are Sharp Edges bitcoin
"There's no way to abstract out private keys without compromising security."
Can you expand on this? This is where I think the discussion gets interesting with some of the ideas from the Bitkey team.
At the end of the day the user will need a private key they posses if they want true custody. Whether it be the actual key to their bitcoin or a password that is used to derive an encryption key to a backup of the real key.
There's no real way around it.
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The way around it is to use multisig.
Using a variety of signing devices provides additive security. A lost or old device can be rotated out of the quorum, no seed phrases needed .
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No this is a terrible idea. You still need a backup of a lost device so you can generate the redeem script.
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Yes, there is data to back up.
No, it doesn’t require a seed from every device.
This has been the value proposition of Casa for over five years, it’s not some obscure theoretical concept. It’s surprising how misunderstood multisig still is today, especially within the bitcoin dev community.
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Yeah if you want a trusted 3rd party in your multisig to back it up then that works. However you have massive trade offs for that.
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I provided an example of a product that’s been on the market for half a decade to illustrate the absurdity of the claim that multisig is useless as a redundancy solution.
This redundancy+security model is built on Bitcoin primitives. Nothing about it requires a third party.
Regardless, for 99% of the population, granting a third party access to view their transactions in exchange for self custody of assets (and the possibility of having them assist in disaster recovery), is a huge improvement over giving up custody to a third party, which is the default in most cases (fiat banking/investments, Bitcoin held on exchanges).
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