3 ms·

I’ve read so many news stories of people gone missing who had been know to have sole access to bitcoin wallets with large amount of bitcoins in them. I wonder

by matesz 18d ago

I’ve read so many news stories of people gone missing who had been know to have sole access to bitcoin wallets with large amount of bitcoins in them. I wonder how people at large crypto exchanges handle that. Perhaps shamir share the access to the pkey password and store parts at secure places like a bank? And make official access protocol akin to dnssec, but simplified?

krageon 18d ago
Large exchanges handle this very simply: If they have the keys, it goes to the inheritor(s) once they get a court order. If they do not, it goes nowhere
- slipwalker 17d ago
  but what sort of people keep their bitcoins on the exchange ? the whole point is about not being seizable by dirty governments...
  - lizardking 17d ago
    "Number go up" people
  - debesyla 17d ago
    Hype vibe investors, probably.
  - pjc50 17d ago
    Traders; low information investors; people who are not 100% confident in their personal infosec and not willing to lose their bitcoins on their own. "Not being seizable" hasn't really worked out for bitcoiners who've been arrested. Or for that matter robbed at gunpoint.
    - skinfaxi 17d ago
      > "Not being seizable" hasn't really worked out for bitcoiners who've been arrested. Or for that matter robbed at gunpoint. This seems orthogonal to the ability to seize assets.
    - lowdest 17d ago
      There are plenty of legends of old wallets "waking up" due to the person getting out of prison, as it seems the only plausible way someone can sit on 30 BTC for 10-15 years, through all the news and price movements, without touching it once. One would only expect to hear about the successful seizures law enforcement makes.
  - LtWorf 17d ago
    People who want to be scammed.
  - plopilop 17d ago
    Pretty much everyone. There's a reason people lost money with ftx, Mt gox and other scams. Managing your private keys is cumbersome, error prone, requires some computer literacy, the list goes on. Tbh I have been kind of impressed by how fast L2 businesses brought back centralisation in every possible way. I guess it's more efficient for them. In the same way, the internet was supposed to be decentralised, everyone being in charge of their own servers. But in practice nobody has the time to set up their own MX servers.
  - jubilanti 17d ago
    > but what sort of people keep their bitcoins on the exchange ? the whole point is about not being seizable by dirty governments... For most people, cryptocurrency is just another stock market / betting app.
  - thesuitonym 17d ago
    > not being seizable by dirty governments If you believe that, I have some land to sell you
  - ajkjk 17d ago
    Most people don't care about that at all
imhoguy 17d ago
Worse when crypto exchange bosses go missing https://archive.is/lPpRz https://archive.is/lPpRz
- TheSkyHasEyes 17d ago
  Or this. https://www.osc.ca/quadrigacxreport/ https://www.osc.ca/quadrigacxreport/
  - conorcleary 17d ago
    :'(
jackb4040 17d ago
I worked at a crypto exchange, yes we used shamir shares. But probably not as sophisticated as you're thinking, there was basically one big "break glass" text document with all the keys. And then a hand-rolled software on each person's laptop to distribute the plain text and run / practice the 3/5 recovery ceremony. So anyone losing their device would be equivalent to someone quitting and require its own ceremony to reissue a key, but I don't think that ever actually happened. We explored using smart contracts to have logic perform the 3/5 consensus rather than a cryptosystem, but that was never rolled out while I was there. Social recovery wallets in general did not take off, which was a big learning moment for me that very few people actually cared about the technology and what they really wanted was an app with as many gambling features as possible that uploaded their keys to google drive.
- IAmBroom 17d ago
  > Social recovery wallets in general did not take off, which was a big learning moment for me that very few people actually cared about the technology and what they really wanted was an app with as many gambling features as possible that uploaded their keys to google drive. People who are not HN-profile never care about the technology, and always care about usable, convenient features. The shocker is: most HN-profile people feel the same way. Also see: https://m.xkcd.com/2501/ https://m.xkcd.com/2501/
  - jackb4040 17d ago
    Yes, I do agree with this. What rubbed me the wrong way was all the cynical people who would talk endlessly about how revolutionary the tech was and all the possibilities it opened to get others invested, but ran companies that were just casinos and actually could have simpler operations without the crypto parts! Most people in pre-NFT crypto has someone in their network who worked on an outright Ponzi scheme.
    - dspillett 17d ago
      > but ran companies that were just casinos and actually could have simpler operations without the crypto parts But during the big buzz, the crypto parts were what got those companies any exposure at all.
ecesena 17d ago
A better solution (than Shamir secret sharing) are threshold signatures. The difference is that with Shamir you have to reconstruct the private key in one place before you can sign. With threshold signatures multiple servers can collaboratively sign without ever reconstructing the private key in a single place. For chains like Solana, Aptos, SUI that use ed25519 (schnorr signature), there's a pretty clean solution called FROST. For Bitcoin and Ethereum/EVMs that use ECDSA it's a bit trickier but there's been a lot of research recently, so there are solutions.
deleted 17d ago
[deleted]

by matesz 18d ago

krageon 18d ago

Large exchanges handle this very simply: If they have the keys, it goes to the inheritor(s) once they get a court order. If they do not, it goes nowhere

slipwalker 17d ago
but what sort of people keep their bitcoins on the exchange ? the whole point is about not being seizable by dirty governments...
- lizardking 17d ago
  "Number go up" people
- debesyla 17d ago
  Hype vibe investors, probably.
- pjc50 17d ago
  Traders; low information investors; people who are not 100% confident in their personal infosec and not willing to lose their bitcoins on their own. "Not being seizable" hasn't really worked out for bitcoiners who've been arrested. Or for that matter robbed at gunpoint.
  - skinfaxi 17d ago
    > "Not being seizable" hasn't really worked out for bitcoiners who've been arrested. Or for that matter robbed at gunpoint. This seems orthogonal to the ability to seize assets.
  - lowdest 17d ago
    There are plenty of legends of old wallets "waking up" due to the person getting out of prison, as it seems the only plausible way someone can sit on 30 BTC for 10-15 years, through all the news and price movements, without touching it once. One would only expect to hear about the successful seizures law enforcement makes.
- LtWorf 17d ago
  People who want to be scammed.
- plopilop 17d ago
  Pretty much everyone. There's a reason people lost money with ftx, Mt gox and other scams. Managing your private keys is cumbersome, error prone, requires some computer literacy, the list goes on. Tbh I have been kind of impressed by how fast L2 businesses brought back centralisation in every possible way. I guess it's more efficient for them. In the same way, the internet was supposed to be decentralised, everyone being in charge of their own servers. But in practice nobody has the time to set up their own MX servers.
- jubilanti 17d ago
  > but what sort of people keep their bitcoins on the exchange ? the whole point is about not being seizable by dirty governments... For most people, cryptocurrency is just another stock market / betting app.
- thesuitonym 17d ago
  > not being seizable by dirty governments If you believe that, I have some land to sell you
- ajkjk 17d ago
  Most people don't care about that at all

imhoguy 17d ago

Worse when crypto exchange bosses go missing https://archive.is/lPpRz https://archive.is/lPpRz

TheSkyHasEyes 17d ago
Or this. https://www.osc.ca/quadrigacxreport/ https://www.osc.ca/quadrigacxreport/
- conorcleary 17d ago
  :'(

jackb4040 17d ago

I worked at a crypto exchange, yes we used shamir shares. But probably not as sophisticated as you're thinking, there was basically one big "break glass" text document with all the keys. And then a hand-rolled software on each person's laptop to distribute the plain text and run / practice the 3/5 recovery ceremony. So anyone losing their device would be equivalent to someone quitting and require its own ceremony to reissue a key, but I don't think that ever actually happened. We explored using smart contracts to have logic perform the 3/5 consensus rather than a cryptosystem, but that was never rolled out while I was there. Social recovery wallets in general did not take off, which was a big learning moment for me that very few people actually cared about the technology and what they really wanted was an app with as many gambling features as possible that uploaded their keys to google drive.

IAmBroom 17d ago
> Social recovery wallets in general did not take off, which was a big learning moment for me that very few people actually cared about the technology and what they really wanted was an app with as many gambling features as possible that uploaded their keys to google drive. People who are not HN-profile never care about the technology, and always care about usable, convenient features. The shocker is: most HN-profile people feel the same way. Also see: https://m.xkcd.com/2501/ https://m.xkcd.com/2501/
- jackb4040 17d ago
  Yes, I do agree with this. What rubbed me the wrong way was all the cynical people who would talk endlessly about how revolutionary the tech was and all the possibilities it opened to get others invested, but ran companies that were just casinos and actually could have simpler operations without the crypto parts! Most people in pre-NFT crypto has someone in their network who worked on an outright Ponzi scheme.
  - dspillett 17d ago
    > but ran companies that were just casinos and actually could have simpler operations without the crypto parts But during the big buzz, the crypto parts were what got those companies any exposure at all.

ecesena 17d ago

A better solution (than Shamir secret sharing) are threshold signatures. The difference is that with Shamir you have to reconstruct the private key in one place before you can sign. With threshold signatures multiple servers can collaboratively sign without ever reconstructing the private key in a single place. For chains like Solana, Aptos, SUI that use ed25519 (schnorr signature), there's a pretty clean solution called FROST. For Bitcoin and Ethereum/EVMs that use ECDSA it's a bit trickier but there's been a lot of research recently, so there are solutions.

deleted 17d ago

[deleted]