Cypherock
  • Introduction
  • Design Decisions
    • The balance between security and convenience
    • Cypherock X1 Hardware architecture
      • Using ultrasonic welding for the X1 Vault enclosure
      • Encrypted NFC communication for X1 cards
      • Using Javacards instead of MicroSD
      • Choosing USB vs QR Code
      • Why the X1 cards are not upgradeable
    • Cypherock is BIP39 compliant
    • Private keys should be near to impossible to extract
    • Conflict between trusted parties should not result in unauthorized access
    • Using Shamir Secret Sharing vs. Multi-sig
      • How is Shamir Secret Sharing implemented within Cypherock X1
      • Why Cypherock has a default 2/5 threshold scheme
      • Rejected Key Schemes
    • PIN Protection on Cypherock X1
      • Difference between backing up your PIN vs. Seed Phrase
  • Security Overview
    • Introduction
    • Keylabs - Third Party Security Audit
    • Remote Attacks
    • Physical Attacks
      • $5 Wrench Attack
      • PIN Brute Force Attack
      • Evil Maid Attack
      • Flashing Malicious Firmware
      • Side Channel Attack
      • Supply Chain Attack
  • Cypherock X1 Features
    • Eliminate messy paper backups
    • Open source with secure elements
    • Use Cypherock as a seed phrase vault
    • All-in-one Portfolio Manager
  • Getting Started
    • Download cySync
    • Import Seed Phrase from existing BIP39 compatible wallet
    • Generate a new wallet with Cypherock X1
    • How Cypherock generates your 24-word seed phrase
    • Best practices in keeping your X1 cards secure
      • Use the protective card sleeves
      • Geographical Seperation
      • Choosing your guardians
    • How do I know I am not locked-in to using only Cypherock X1
    • How do I know my Cypherock X1 is genuine?
      • Email 2FA for Product Authentication
    • How to recover your Crypto assets in the case of loss or theft
    • What happens to my Cypherock X1 if Cypherock goes out of business?
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  1. Design Decisions
  2. Using Shamir Secret Sharing vs. Multi-sig

Why Cypherock has a default 2/5 threshold scheme

Cypherock X1 uses a cryptographic threshold scheme called Shamir's Secret Sharing to reconstruct the private key during runtime to sign a transaction that is deleted from the temporary memory as soon as the transaction is digitally signed. Cypherock X1 currently implements 2 of 5 Shamir's Secret Sharing. Hence a user today requires either 1 X1 Card and the X1 Vault, or 2 X1 Cards to reconstruct the Crypto private keys. An average user ideally keeps 2 of the cryptographic parts at home (both in separate rooms) and the remaining 3 parts away from home.

While considering all of the schemes, here are some insights that led us to finalize the 2/5 threshold design:

  1. There needs to be enough redundancy to avoid loss while protecting the user enough against the potential theft of private keys. This is where the current single-signature wallets fail and m/n threshold schemes help achieve this optimally. Human error tends to be the most prevalent reason for the loss of funds. Therefore, the 2/5 scheme created enough redundancy that the user can afford to lose cryptographic parts and still be assured that the Crypto assets are accessible. At the same time, it avoids a single point of failure for potential theft.

  2. A threshold scheme of above 2/5, say, 3/5 would optimize for security but will come with a significant compromise on the wallet user experience. The 2/5 scheme avoids a single point of failure and provides exponentially more security than 1/5 and more convenience than 3/5 and above. With a 2/5 threshold scheme, the user still has the choice to keep the X1 Card and X1 Vault in the same place giving him a similar UX to current single signature hardware wallets, or keeping them as far away as possible to optimize for security.

  3. It is important there isn't any single point of failure for storing the Cryptographic parts which are going to be inactive and kept as backup. In 2/5 scheme, the remaining 3 are the inactive parts. With 2/5 scheme, users have the ability to mitigate single points of failure where the user can choose to keep 1 X1 Card in a bank locker, 1 X1 Card with a family member, and 1 X1 Card with a friend. These 3 personas have 3 different risk profiles for a user and hence mitigate the risks of a single point of failure even with inactive part storage.

  4. While inheriting the assets through Cypherock inheritance service (launching soon), it is important for the user to avoid a single point of failure in nominee selection. The user should be able to give two different cards to at least 2 different nominees so that even if one nominee is unavailable, the other one should be able to manage the recovery. At the bare minimum, then the average user needs to have 2 Cryptographic parts accessible to him at all times, 2 parts given to 2 different nominees and 1 additional part not easily accessible to the user and not given to any nominee as well.

At present, Cypherock is not considering offering a custom threshold scheme, but that may change in the future.

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Last updated 2 years ago

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