Reusable Cold Key HSM for Secure Offline Cryptocurrency Signing
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Solution Overview
Problem
Existing cryptocurrency cold storage systems face security risks when private keys are accessed online for transaction signing, as they can be compromised, leading to potential unauthorized access.
Innovation Solution
The system generates and manages private keys offline using Shamir's Secret Sharing to shard the keys, encrypting them and distributing them securely among account managers, allowing for offline transaction signing without exposing the private key in clear form, using a Reusable Cold Key (RuCK) Hardware Security Module (HSM) for secure key reconstruction and signing.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If private keys are moved online to sign cryptocurrency transactions, then transaction signing capability is improved, but security is worsened due to potential compromise
Solution Approach 1:
The private key is divided into multiple shards using Shamir's Secret Sharing scheme. These shards are distributed to different account managers and stored in a cold storage system. No single shard contains the complete private key, so even if online systems are compromised, the full key cannot be reconstructed without multiple shards and the secret polynomial.
Solution Approach 2:
A trusted third party (the cold storage system) acts as an intermediary to facilitate transaction signing without exposing the private key. The system reconstructs the secret polynomial from collected shards and uses it to generate signatures, then destroys the polynomial afterward. This intermediary approach enables online transaction capability while maintaining offline key security.
2Reliability
If private keys are generated and stored offline in cold storage, then security is improved, but transaction signing capability is worsened due to offline restriction
Solution Approach 1:
The system dynamically transitions between static cold storage and active signing operations. During normal operation, key shards remain static in cold storage. When transaction signing is needed, the system dynamically reconstructs the secret polynomial from collected shards, uses it for signing, then destroys it. This dynamic approach enables offline storage with online signing capability.
Solution Approach 2:
The private key is pre-divided into shards and distributed to account managers before any transaction occurs. The cold storage system pre-establishes the secret polynomial and stores it securely. When signing is needed, the preliminary setup allows rapid reconstruction and signing without requiring full key generation or storage online.
3Productivity
If private keys are reused for multiple transactions, then productivity is improved, but security risk is worsened due to repeated exposure
Solution Approach 1:
The system employs periodic reconstruction and destruction of the secret polynomial for each transaction signing operation. Rather than continuously exposing the key, the polynomial is reconstructed only when needed for signing, used immediately, then destroyed. This periodic action pattern enables key reuse for multiple transactions while minimizing exposure time and attack surface.
Data Source
AI summary
In certain embodiments, the use of re-usable cold storage keys to sign messages may be facilitated. In some embodiments, an offline computer system (operating within an offline computing environment) may obtain, from a removable computer-readable storage medium, signing key shards corresponding to a signing private key and a blockchain transaction to be signed, where the signing key shards satisfy a key shard threshold that is (i) a number of key shards required for reconstructing the signing private key and (ii) less than a number of key shards derived from the signing private key using a ceremony key. The offline computer system may form a ciphertext of the signing private key using the signing key shards and reconstruct the signing private key by decrypting the ciphertext using the ceremony key. The offline computer system may sign the blockchain transaction using the signing private key.