Protecting Your Funds: Green Wallet's PIN and Multisignature Setup
If you have a 2FA enabled 2 of 2 account on Green Wallet, the funds in your wallet are not subject to theft even should your phone be stolen or confiscated. This is protected somewhat with your PIN. It is nice you have that first level of protection of your privacy. When you have a true 2 of 2 multisignature setup, and by that I mean one where one user has a private key and another entity has the other but neither have both, the other party can protect you from theft of your funds should you lose control of your private key. Unauthorized users who even have access to your device and the key contained therein will not be able to spend your funds... most of the time. To understand the "most of the time" part read on.
Enhancing Security with Green Wallet's 2-of-2 Non-Custodial Account
When it comes to securing your digital assets, the Green Wallet offers a robust solution with its 2-of-2 account option. This non-custodial setup provides an additional layer of protection, giving users peace of mind even if their private key is compromised. Let's explore how this system works and the benefits it offers.
Understanding the 2-of-2 Account
The Green Wallet's 2-of-2 account is designed to enhance security. In this setup, the user holds the first key. The second key is held by Green Wallet's company, serving as an additional safeguard for the user's money.
Enhanced Protection through Cosigning
Green Wallet's company plays a vital role in securing your funds. By holding the second key, they can cosign your transactions, providing an extra layer of verification and protection. In the event that someone obtains your private key, the wallet provider can still safeguard your money by requiring the second key for transaction authorization.
Time-Based Second Factor
To balance security and usability, the Green Wallet implements a time-based second factor. After a year of inactivity, the second factor is disabled, allowing you to spend your funds without the need for additional verification. This feature ensures that your day-to-day transactions remain convenient while maintaining a high level of security.
Benefits of the Green Wallet's 2-of-2 Account
By opting for Green Wallet's 2-of-2 account, you benefit from the best of both worlds. You retain control over your funds with your private key while having the added protection of the wallet provider's cosigning capabilities. This setup mitigates the risk of unauthorized access and provides an additional safeguard against potential threats.
Even Better Money than 1-of-1 Bitcoin:
The Green Wallet's 2-of-2 account offers a secure and convenient solution for managing your digital assets. With the wallet provider's involvement in cosigning transactions and the time-based second factor, your funds are protected even in the face of compromised private keys. By leveraging this non-custodial setup, you can confidently store and transact with your cryptocurrencies while enjoying peace of mind knowing that your funds are well-protected.
Enhancing Security with Green Wallet's 2FA-Enabled 2-of-2 Account
Safeguarding Your Second Factor: Exploring Security Measures in Green Wallet
The PIN feature affords privacy of the amount of funds and also protection from spending the funds. Should this fail somehow, a second key needed for signing is held and will only cosign if the enabled second factor validates the user. The second factor in Green Wallet can be Email, SMS, a phone call or an authenticator app. The former three can be eavesdropped on, or spoofed with social engineering attacks via SIM swapping.
If your phone is stolen, your SMS, phone call or probably your email will go right into the hands of the thief who has your telephone. (Duh) It isn't a great way to secure your funds if you use this in the wrong way. Also, if your Authenticator app is on the stolen phone the thief will also have access to your coins. However, you can use these in a secure way. Use a phone number you of a SIM card and second phone that you leave at home, an email you cannot access from your phone, or an authenticator app on a second device that may or may not be a smart phone.
Could Green Wallet Freeze Your Funds?
Bitcoin removes the intermediary in money transfer but a second factor brings permissions according to the script it is funded to. If Green Wallet becomes evil, or destroyed somehow, your second factor will become useless and your money will be effectively frozen. Now in the general case, this would mean your funds would be frozen indefinitely.
What if your other phone is lost, stolen or dead as a door nail?
It seems to me you need to keep extra credentials to your analogue of a bank, that is your primary key. So, your phone's private key should be backed up in a safe place, perhaps even in a physical bank. The other private key could be owned by several groups or individuals. It could even be kept by several individuals you trust.
Decentralizing the Second Key
Suppose people with esteem and reputation, could keep a private key (that I don't keep myself) for Bitcoin. Instead of Green Wallet's company holding a second key, we could have several high reputation, individuals of exceptional character holding the second key. For example, Trace Mayer, Adam B. Levine, John Barret, some guy called Sam Bankman agreed to do this. Each of these would get a copy of the second key and I just need to lose this key. My own private key goes on my phone. Of course these individuals would need to maintain the computer systems to do verification in the ways I need it done. In a sense these three would have taken on the role of protecting my funds from physical violence. This is what fiat-banks do. Should any of them lose interest, I could use either of the other two.
Most of these guys wouldn't be dishonest but suppose Sam Bankman decided he wanted to steal my funds. He couldn't in this system. He could refuse transactions but the others could still cosign the transaction so the user could still send funds. He would need the user's key. He cannot even get the others to help him even if they would, for the others just have the same key.
Systems with more than two key pairs
There are systems where there are more than two private keys. Here explore their advantages:
The 2 of N System on Hive
Although Hive has less acceptance world wide than the Argentine peso, it has a nice multisignature system. You can have a weight of 4 assigned to the private key in your possession and set the threshold to 5 and add the accounts authority of one to up to four quasi-bankers: These would be four Hive users with some kind of software running on their systems for validation and cosigning. There is no transport of private keys. The bankers cannot intro
On the protocol level and theoretically one of these accounts would cosign your transactions due to their authentication methods. This could be SMS, phone call, email loop, authenticator, or even a personal meeting!
These kinds of transactions are not yet implemented on any wallet I am aware of except for one that I wrote and have backed up into an archive somewhere. All of the web software assume there is a single for every transaction required only.
I am not prepared to provide this authentication for free and for this reason I doubt anyone would. There is no maintained wallet that I know of that supports this setup there just isn't an incentive for me to do it. Would some whales with significant worth in Hive power or Hive or Hive dollars be interested in something like this?
Most of these guys wouldn't be dishonest but suppose Sam Bankman decided he wanted to steal my funds. He would need the user's key. He could refuse transactions but the others could still cosign the transaction so the user could still send funds. If he were able to steal the other keys to try to make a transaction he simply couldn't for the him and the other three don't have enough weight to make a transaction get validated.
It would have a perhaps monthly and/or per-transaction cost to use something like this I think. So I can bring it up to date but there has to be demand for it. So we are back to lack of adoption of Hive tokens.
The N+1 of 2N System on Bitcoin
In this system, we have a N of 2N-1. For example, instead of being able to assign a weight of 4, we need to have four private keys for the local phone and we need five signatures. The four from the phone and one from one of the private quasibanks. And each quasi-bank provides its public key for the setup. There is no transport of private keys. Risk of institutional failure is mitigated by having multiple cosigners rather than a single one as in the previous example. All of these second factors mentioned before could be used.
The Qasi-bank of your house
Your house could be your quasi-bank, but should you be robbed or raided you essentially could have your bitcoins robbed from you or destroyed. So forget about your own house. It is better to have a network of people to cosign who live outside of your tax jurisdiction. Preferably not known by potential roving bandits or stationary bandits.
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