In a flurry of tweets and podcast interviews, Ledger’s top brass found themselves on the hot seat yesterday, struggling to convince their die-hard users that their latest innovation, ‘Recover’, is as secure as the golden key to a crypto fortress. This new feature, though giving a potential ‘unlock’ option, pledges to uphold the hard wallet’s holy grail – security. Ledger’s efforts to sweep a confusing tweet under the rug, which hinted at the wallet’s firmware enabling ‘key extraction’, has only fanned the flames.
Users had comfortably nested in the belief that their 24-word seed phrase – the sacred password to their crypto kingdom, was forever tucked away safely in their Ledger hardware wallet. But Charles Guillemet, the CTO of Ledger, shed light on Recover’s true capabilities. This new feature allows the wallet’s software to scatter encrypted pieces, or “shards”, of these private keys out into the world. The shards can then be assembled like a jigsaw puzzle to restore the seed phrase. Importantly, Guillemet assures that the Recover tool is merely an optional add-on for Ledger users.
Guillemet, during his feature on the Bankless podcast, admitted that users “were a little bit surprised to understand” the new functionality. He went on to rationalize the tradeoff, explaining that the Ledger Recover tool is perfect for those who are hesitant to go completely off-grid with an offline cold wallet, yet still want more security than your run-of-the-mill online exchange or wallet provides.
Despite the confusion and subsequent Twitter clean-up by Ledger’s customer support, Guillemet was clear in stating that Recover is not meant to supplant Ledger’s mainstay product. Instead, he sees it as a bridging mechanism to ease the novice crypto holders into the world of self-custody, a concept that might seem daunting at first. “We need to find a way for newcomers in order to enable mass adoption,” Guillemet asserted.
The crux of Ledger’s Recover tool lies in its “sharding” process. A user’s seed phrase is split into three encrypted parts or ‘shards’, each entrusted with Ledger, Coincover, and a yet-unnamed third party. In the event of a lost seed phrase, the user can prove their identity to two out of these three companies, combine the shards they hold, and presto, they regain access to their wallet. “It gets one step closer to self-custody and self-sovereignty,” said Guillemet, all while assuring that the seed never needs to leave the device if users opt not to use the Recover feature.