Two major players in the hardware wallet industry, Trezor and Ledger had some news to their fans this week. While the first company implemented a new security feature, the second had good news for the ERC-20 token owners.
What is Shamir Backup – the new Trezor security standard explained
Earlier this week Trezor, developed by SatoshiLabs, introduced Shamir Backup, a new security standard to protect the backup of a recovery phrase, which is the key to accessing your digital assets. But what does it mean and how does it actually work?
Today, after 20 months of development, user testing and talks with the smartest people in the industry, we are introducing #SLIP39 aka #Shamir Backup to our @Trezor Model T. I’d like to thank everyone involved in this huge effort pushing digital self-sovereignty way further! https://t.co/wUxLVASWi5
— Pavol Rusnak (@pavolrusnak) September 4, 2019
Named under the cryptographer Adi Shamir, Shamir Backup is based on Shamir’s Secret Sharing algorithm. It constitutes SLIP-0039 security standard which, unlike more popular BIP-0039, lets you secure a secret in a distributed way. This is particularly great for protecting your recovery seed, especially if you want to alleviate the risks by hiding it in different locations. Here’s how it works.
When generating a new wallet with Shamir Backup, Trezor Model T lets you choose how many recovery shares you want to make (max. 16) and a threshold for how many recovery shares will be required to recover the wallet. For instance, if you have five trustworthy relatives or friends, you can choose to generate five recovery shares, and set the recovery threshold to three, so that only three out of five shares are required to recover your wallets. Each recovery share is similar to a regular recovery seed but instead of 24 words, you get a sequence of 20 words per share. Essentially, you get to recover your wallet even if some of recovery shares are lost.
“The advantage of using threshold secret sharing is that it allows us to find a middle ground between the two extreme solutions of either copying or fragmenting the recovery seed, and thus it allows us to balance the risk of loss and the risk of destruction,” states SatoshiLabs in a blog post.
For the most optimal balance between the risks, it is recommended to use a 2-of-3 or a 3-of-5 scheme. Besides, it is not meant to replace multisignature (it requires more than one key to authorize a cryptocurrency transaction), as the two security measures can be used together.
— Pavol Rusnak (@pavolrusnak) September 5, 2019
So far, the Trezor Model T hardware wallet is reportedly the first cold storage device to implement Shamir’s Backup method. Nevertheless, the new SLIP-0039 standard is free to be implemented by anyone, so it is possible that more hardware wallet manufacturers will adopt it in the near future.
Ledger Live update
Meanwhile, competing hardware wallet company, Ledger, has good news for its fans, too.
The wallet provider released an update for its wallet companion app, Ledger Live, as from now on, it will allow users to manage 22 coins, as well as over 1,250 Ethereum‘s ERC-20 tokens. The Ledger Live app is available on both smartphones and desktop devices and lets users control their digital assets without exposing their private keys to unauthorized third-parties.
Oww, seriously guys? You’re competitor had a great product with some a nice development (shamir’s backup @Trezor) and you’re only told is about #ERC20 today? Where have you been all this time? C’mon guys..make some improvment for your customer
— Lotus Trust (@Iotustrust) September 5, 2019
Great achievement. I’ve been waiting for this for ages.. Really appreciate everything you guys have been doing to make Ledger as friendly and great as possible.
No more need to use etherscan for checking my ERC-20 investments, cheers!
PS: Huge fan of Ledger.
— Kerix Torres (@KerixTorres) September 5, 2019
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