Self-Custody Cryptographic Transactions via Key Segmentation
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Solution Overview
Problem
Existing blockchain and distributed ledger technologies require complex management of private keys for transaction approval, leading to security and legal implications, especially in multi-party environments where key custody is concentrated.
Innovation Solution
The system integrates self-custody management by allowing users to maintain private keys on devices they control, while a cloud-based asset management application handles transaction initiation and execution, using secure communication channels and distributed ledger monitoring to ensure transaction integrity.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If private key custody is centralized for transaction approval, then transaction security is improved, but the risk of large-scale digital theft increases and user control is reduced
Solution Approach 1:
The system segments the private key into multiple shares and distributes them across multiple devices controlled by the user. No single device holds the complete private key, eliminating the single point of failure and reducing the impact of any single device compromise. This segmentation allows transaction approval to proceed securely while preventing large-scale digital theft even if some devices are compromised.
Solution Approach 2:
The system introduces a cloud-based asset management application as an intermediary that coordinates transaction approval without requiring centralized private key custody. The intermediary facilitates secure communication between multiple user devices and the blockchain network, enabling transaction security through distributed coordination rather than centralized key management.
2Ease of operation
If private key management is decentralized to user devices, then user control and security are improved, but transaction coordination complexity increases
Solution Approach 1:
The cloud-based asset management application serves as an intermediary that abstracts the complexity of coordinating multiple decentralized devices. It manages the segmentation and recombination of private key shares, handles communication between devices, and coordinates transaction approval processes, thereby maintaining ease of operation for users while managing the inherent coordination complexity.
Solution Approach 2:
The asset management application performs multiple functions including private key segmentation, transaction coordination, device communication management, and blockchain interaction. This multi-functionality consolidates various complex operations into a single universal platform, reducing the perceived complexity for users while enabling decentralized private key management.
3Productivity
If cloud-based asset management is used, then transaction processing efficiency is improved, but private key security risks increase
Solution Approach 1:
The system extracts the complete private key from the cloud-based asset management application and distributes its shares to user-controlled devices. The cloud platform only stores and processes transaction data and coordinates approval, never holding the complete private key. This extraction eliminates the security risk of cloud-based private key storage while maintaining the efficiency benefits of cloud-based transaction management.
Solution Approach 2:
The private key is segmented into multiple shares distributed across user devices, ensuring that the cloud-based asset management application cannot access the complete private key even if compromised. This segmentation maintains private key security while allowing the cloud platform to efficiently coordinate transactions through its intermediary role.
Data Source
AI summary
This disclosure describes systems, software, and computer implemented methods including receiving a request from a second entity to transfer a digital asset to a first entity. Receiving a request for an address and public key is sent to an asset custody application executing on a device that is managed by the first entity. Receiving, a public key and a wallet address and sends the wallet address to the second entity. Further this disclosure describes receiving a request to transfer a digital asset from a first entity to a second entity. Generating a transaction package pursuant to the one or more parameters, the transaction package including a transaction and a public key of a digital wallet associated with the first entity. Executing the transaction and sending the signed transaction package to a distributed ledger.