Cryptocurrency Wallet Provisioning via Key Segmentation
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Solution Overview
Problem
Current methods for storing cryptocurrency wallets, such as hot and cold wallets, face challenges including vulnerability to hacking and risk of loss or damage, leading to difficulties in securely provisioning and storing cryptocurrency wallets.
Innovation Solution
A system comprising a card, an administrator processor, and a server is used to securely provision a cryptocurrency wallet. The administrator processor generates a private key, public key, and key-encrypted-key (KEK), and transmits user datum to the server, which then encrypts and transmits the keys back to the administrator processor for storage on the card in encrypted form.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If a hot wallet is used to store cryptocurrency, then accessibility and convenience are improved, but security against hacking is worsened
Solution Approach 1:
The system segments the private key into multiple encrypted portions and distributes them across multiple devices (smart card, administrator processor, server). No single device holds the complete private key, making it resistant to hacking while maintaining accessibility through coordinated retrieval.
Solution Approach 2:
The patent introduces an intermediary encryption layer using public-key cryptography and KEKs. The private key is encrypted with a KEK, which is further encrypted with the user's public key. This intermediary encryption mechanism protects against hacking while allowing authorized access through the corresponding private key.
2Object-affected harmful factors
If a cold wallet is used to store cryptocurrency, then security against hacking is improved, but risk of loss or damage is worsened
Solution Approach 1:
The system performs preliminary action by pre-distributing encrypted portions of the private key to multiple secure locations (smart card, administrator processor, server) before any loss or damage occurs. This ensures that even if one device is lost or damaged, the private key can be reconstructed from the remaining distributed portions.
Solution Approach 2:
The patent implements beforehand cushioning by creating redundant encrypted copies of the private key across multiple devices and locations. This redundancy acts as a cushion against loss or damage, ensuring that the cryptocurrency remains accessible even if some storage devices fail or are lost.
3Reliability
If private key is distributed across multiple devices, then security and recovery options are improved, but system complexity is worsened
Solution Approach 1:
The smart card serves multiple functions: it stores encrypted private key portions, acts as a secure element for cryptographic operations, and provides a portable access mechanism. This multi-functionality reduces the need for separate dedicated devices for each security function, thereby managing complexity.
Solution Approach 2:
The system implements feedback mechanisms where the administrator processor coordinates key distribution, the smart card provides authentication feedback, and the server manages the encrypted key repositories. This structured feedback loop manages the complexity of multi-device coordination through defined communication protocols and verification steps.
Data Source
AI summary
The present embodiments include a system and method for provisioning, storing, and deriving a cryptocurrency wallet. The system includes a card, a user device, an administrator processor, and a server. The method includes generating a private key and a public key over a user datum, encrypting the keys over a key-encryption-key (KEK), and transmitting the keys to a card. The keys can be optionally stored on a server in encrypted form. Alternatively, the keys can be derived from the user datum if the user has lost them.