Non-Custodial Key Storage via Seed Derivation
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Solution Overview
Problem
Asymmetric cryptography systems face security risks due to the vulnerability of private keys, which can be lost, damaged, or accessed maliciously, leading to unauthorized access and compromised security in systems like cryptocurrency wallets and blockchains.
Innovation Solution
Implementing non-custodial key generation and storage methods where the private key is encrypted using a cipher that does not rely on secrets stored on the user's device or any network location, ensuring the key is never stored unencrypted, thus mitigating risks of loss or malicious access.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If private keys are stored on user devices or third-party servers, then key accessibility is improved, but security is worsened due to risk of loss, damage, or malicious access
Solution Approach 1:
The patent extracts the secret component (seed value) from the key storage system entirely. Instead of storing the private key or its encryption, the system only stores the public key and derives the private key temporarily during transactions using the seed value, which is never stored. This eliminates the security vulnerability of stored secrets while maintaining key functionality.
Solution Approach 2:
The patent introduces a seed value as an intermediary that enables key generation without being stored. The seed value acts as a mediator that allows the system to regenerate private keys on-demand without ever storing the private key itself or its encryption, thus resolving the contradiction between accessibility and security.
2Reliability
If private keys are encrypted and stored, then security is improved, but vulnerability to loss or damage worsens due to reliance on storage media
Solution Approach 1:
The patent removes the encrypted private key from storage entirely. Instead of storing encrypted keys that remain vulnerable to storage media failure, the system stores only the public key and uses on-demand derivation from the seed value. This eliminates the storage media vulnerability while maintaining security through cryptographic principles rather than physical security.
3Ease of operation
If third-party servers store private keys, then key management is simplified, but trust requirements increase significantly
Solution Approach 1:
The patent implements self-service key management where the user's device generates and manages private keys locally using the seed value. The system derives private keys on-demand without requiring third-party intervention or storage. This maintains operational simplicity while eliminating the need for trusting third parties with private key security.
Data Source
AI summary
In some aspects, the disclosure is directed to methods and systems for non-custodial key generation and storage in which, other than for brief periods during key generation, when digitally signing data, or when decrypting encrypted data, a user's private key is not stored in an unencrypted form, either on the user's device or external or network storage. In some implementations, the private key is stored encrypted by a cipher that similarly relies on a secret that is not stored on either the user's device or any network location.