Coinspeaker
How Social Recovery Mechanism for Wallet Keys Works

We now live in an age where social capital can also be measured one way or the other. So much so that cryptocurrency startup Vault12 employs a similar social method to distribute stored wallet keys and to integrate them back into one whole when the request for a lost wallet key is requested for.

In a cryptographic method referred to as Shamir’s secret sharing invented by famous Israeli cryptographic expert Adi Shamir, the process employs a process of string a secret among a group of different individuals in parts which can be retrieved later to form a whole.

In the case of Vault12, clients choose a set of individuals referred to as “guardians” who each get to keep a separate portion of the seed phrases which serve as the key recovery mechanism for wallets. In the case of loss of the wallet’s keys, the users can now use the seed phrases to recover access to the wallet. Guardians can also be paid by users for this service.

While many may think that Vault12 has access to the seed phrases stored, the reverse is the case. Sources indicate that the Chief Crypto Officer Wasim Ahmad said:

“It’s all on people’s phones and their devices and it doesn’t pass through any servers, … the company doesn’t have any ability to see any of that. From an external risk perspective, that’s a big deal.”

This also further allows individuals to operate in a trustless environment which is one of the fundamental principles upon which the crypto space operates. It also allows Vault12 to be a principal arbiter in the storage and recovery of the seed phrases which are the basis of access keys recovery to any wallet. 

Vault12 which is backed by cryptocurrency heavyweights such as Winklevoss Capital, True Ventures and Data Collective also allows the user to determine how much in terms of payment will be made and to whom. The app also monitors the online status of each guardian and does inform the user if the guardian goes offline or isn’t available for any reason.

The protection of assets even goes a step further. Determination of guardians by geography is also possible. Multiple backups can be ensured that the seed phrases are kept intact as well. 

Social custody could be the next big thing when it comes to the security of assets. This is because the odds of having a majority gang-up reduces by a wide margin if the user is the only one who knows certain details. Even those who may want to institute a majority attack will have a hard time doing so due to the Byzantine fault tolerance which all functional decentralized solutions must possess. It appears that Vault12 has also been able to remain at par in this regard.

Co-founder and CEO of the startup Max Skibinsky thinks that social recovery is a great idea.

“Every hardware and mobile wallet to a degree passes the final security step [to] users,” he said. “They say, ‘well we have this very secure way of operating the wallet but please keep this recovery phrase or crypto key or whatever’ … [you] own the job of keeping it safe,” said he.

It seems that Vault12 has been able to solve this problem quite nicely. 

How Social Recovery Mechanism for Wallet Keys Works

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