Ledger White Paper Open Sources Seed Phrase Recovery

Cold wallet firm Ledger has launched a new Recovery white paper inviting audits of its protocols following community backlash over its Recover feature.

The white paper discloses Recover’s inner workings after the crypto community ridiculed it for violating the principles of decentralization last month.

Software Splits Seed Phrase for Secure Transmission

The document is the first step of the second phase of Ledger’s accelerated roadmap to open source the code it deploys on its hardware crypto wallets.

According to CTO Charles Guillemet, the whitepaper’s takeaway is that anyone can learn the technical workings of a refreshed Ledger Recover product.

The company accelerated its open-sourcing roadmap after the community railed against its storage of user seed phrases. Cold wallet vendors generate seed phrases customers can use to access funds in wallets on devices they no longer own or can access.

Providers generally do not centrally archive seed phrases but advise customers to create offline backups. On the other hand, hot wallets are always online.

Ledger’s Secret Recovery Phrase is encrypted with a fixed key and split before being safely sent to back up providers. A technique called Shamir Secret Sharing prevents successful interception of the fragments.

Last month, the crypto community erupted over the realization that Ledger’s earlier Recover release stored seed phrases centrally.

Its former CEO Éric Larchevêque reminded users they needed to trust Ledger to use the product. It was not totally “trustless.”

Phishing Headache Plagues Trezor Users

Yesterday, reports emerged that Ledger competitor Trezor was the victim of a scam that scraped seed phrases to steal crypto.

Trezor allows users to specify how many seed phrases they want when signing up. Customers can then select how many seed phrases will unlock their funds. 

Unlike Ledger, Trezor still advises keeping physical copies of all the phrases.

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