Tokyo-based cryptocurrency exchange hacked, losing $530M: NHK

Re:Tokyo-based cryptocurrency exchange hacked, losing $530M:... by icebraining on Friday January 26, 2018 @04:17PM (#16242964)

I think you definitively could make something like Keybase on Bitcoin, by using multiple third-party institutions (chosen by the user) as a fallback.

When sending coins to your storage address, you'd say "anyone can use this money if they have this private key OR if they get a digitally-signed certificate from 3 out of 4 of these keys (A, B, C, D)". Those keys could belong to different institutions (or persons) that would declare they vouch for your identity.

Then if you lost your key, you'd go to each of them to get your certificate signed and could then use the coins again.

Of course, this means that if those institutions colluded, or all got hacked, you could still lose your coins, but it'd be harder than just keeping them in an exchange.

[ Parent | on HN ]

Re:Tokyo-based cryptocurrency exchange hacked, losing $530M:... by cocktailpeanuts on Friday January 26, 2018 @05:17PM (#16243356)

It's called "multisig wallet", and a lot of reputable online wallets implement this.

Instead of doing what you suggested, normally it's 2 of 3 where it's your cold wallet, your hot wallet, and the online wallet provider.

[ Parent | on HN ]

Re:Tokyo-based cryptocurrency exchange hacked, losing $530M:... by KMag on Friday January 26, 2018 @05:06PM (#16243284)

Too bad Bitcoin uses ECDSA instead of Ed25519 (or any other signature algorithm supporting threshold signatures). With threshold signatures, you don't even need something in the wallet saying "any N of the following M", you could just give secret shares to those M parties, and any N of them could collaborate to sign something using your single public key.

[ Parent | on HN ]

Re:Tokyo-based cryptocurrency exchange hacked, losing $530M:... by glitch003 on Friday January 26, 2018 @06:40PM (#16243815)

You could just do that anyway by running Shamir's Secret Sharing Scheme on a Bitcoin private key, splitting the key into M parts where any N of M parts can be combined to recover the original private key.

[ Parent | on HN ]

Re:Tokyo-based cryptocurrency exchange hacked, losing $530M:... by KMag on Friday January 26, 2018 @07:37PM (#16244104)

That's a fair point, but threshold signatures are more generally useful, such as N of M board members authorizing payment to X, without having to place trust in a single board member not to change the transaction to a different amount or address.

[ Parent | on HN ]