From Backups to Collaboration: How Social Recovery Transforms Private Key Security

28 Jun 2023

In the world of cryptocurrencies, private keys serve as the gateway to accessing and having full control over your digital assets. But personally backing up your private keys has created situations where investors lose all their crypto. Social Recovery is a wallet solution that is fast changing how we self-custody our cryptocurrencies and NFTs.

Protecting your private keys is vital to the security and integrity of your crypto holdings. Traditionally, individuals have relied on backing up their private keys through physical means, such as hardware and paper wallets. However, a concept called Social Recovery has emerged as an alternative method that eliminates the need for and problems with traditional backups. 

In this article, we will explore how social recovery replaces the need to back up your private keys while providing a robust security solution for cryptocurrency users.

The problems with backing up your private keys

During the early years of crypto, if an individual wanted to adhere to the famous phrase, “Not your keys, not your coins,” they had to keep custody of their own cryptocurrencies instead of having an exchange or platform do it. As we’ve seen with the recent threat of a Binance asset freeze, a self-custody wallet provides protection if an exchange goes under or is shut down by regulators. 

But, to access the level of control that self-custody wallets offer, each individual must securely and reliably store a 12-word seed phrase, also known as their private keys. Often this is accomplished using a hard wallet or paper wallet. Both types require you to physically store a piece of paper or a hardware device to keep the private keys offline and safe from bad actors. 

  • Hardware wallets allow you to store your seed phrase on an offline device that can be plugged in when using your crypto.  
  • Paper wallets require individuals to write down the seed phrase and physically store it somewhere safe. 

Both types of wallets require you to maintain full responsibility should the device or paper become lost, compromised, or damaged. 

Source: @MMCrypto

As the blockchain industry has evolved, many crypto enthusiasts found themselves having to manage multiple sets of private keys across networks and using different types of wallets. In each instance, if they lost the private keys to one wallet, it meant losing those crypto assets. That is how the term backing up your private keys came about. Crypto investors needed to create multiple backup methods to keep their assets safe. Overall, this has made the process of crypto investing even more complex.  

“The human brain is quite poorly suited for remembering passwords and tracking paper wallets, but it's an ASIC for keeping track of relationships with other people.” - Vitalik Buterin

What is Social Recovery?

Social recovery eliminates the need for backing up your seed phrase through a distributed recovery process. Crypto holders can easily split up their private keys among two or more trusted devices, called Guardians. When a device is lost or compromised, the wallet owner can initiate the recovery process.

How Social Recovery Works

To implement social recovery, the cryptocurrency user selects a group of trusted individuals as their guardians when setting up a wallet. Each guardian is assigned a unique role and responsibility in the recovery process. If a user needs to recover their private keys, they can initiate the social recovery function. The other guardians cannot access the wallet owner’s funds or the private keys - they can only help them recover their crypto assets through social verification.

The steps to Social Recovery:

  1. If you have downloaded a social recovery wallet like Gridlock, you can easily set up your guardians.
  2. If you lose your private keys or access to your device, you can request assistance from your guardians. 
  3. A required number of guardians validate the recovery request as coming from you - someone they know.
  4. All of this is made simple and quick through the user-friendly Gridlock wallet.
  5. After validation of the recovery request by the guardians, the private key is reconstructed for the wallet owner only.
  6. The user regains secure access to their cryptocurrency holdings without ever giving out seed phrase information to anyone else. In other words, they no longer have to back up the private keys.

This decentralized and collaborative approach ensures that no single guardian possesses complete control over the private key, enhancing security and reducing the risk of unauthorized access.

Social Recovery: Summary of Benefits

Enhanced Security: Social recovery introduces an additional layer of security by eliminating the reliance on a single point of failure. Instead of depending on a single backup location, the recovery process requires the collective involvement of trusted guardians, significantly reducing the risk of complete loss due to the failure of a single individual or system.

Reduced Risk of Permanent Loss: Traditional backup methods, such as storing private keys on physical devices or in digital wallets, carry the risk of loss or destruction. Social recovery mitigates this risk by distributing the recovery process among guardians, ensuring that even if one backup method fails, others are available to assist in the recovery process.

Trust in Guardians: Social recovery leverages the trust and relationships individuals have with their chosen guardians. By involving trusted friends, family members, or even specialized third-party services, users can have confidence in the recovery process, knowing that their private key security is in the hands of individuals they trust.

Flexibility and Accessibility: Social recovery makes it easy to select guardians. Users can choose them based on their expertise, proximity, or level of trust. This flexibility ensures that users can create a recovery network tailored to their specific needs and preferences.

User-Friendly Experience: Social recovery simplifies the recovery process, making it more user-friendly compared to traditional backup methods. Instead of managing complex backup procedures, users can rely on their guardians to assist in the recovery process, all with a seamless and intuitive experience.

Conclusion: Diversifying your crypto security

Social recovery wallets are at the heart of keeping your crypto safe, whether it's for protection against a compromised device or insurance against a failed private key backup. 

At Gridlock, we know that when it comes to securing your cryptos and NFTs, personally backing up your seed phrase is simply not safe enough. That’s why we use social recovery to allow crypto holders to distribute private key functionality across multiple locations, devices, and relationships. 

Experience private key resilience and security with the Gridlock wallet by your side.

Download Gridlock today!

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Written by Reid Zedkongor

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Reid Zedkongor is peeling away layers of confusion around blockchain and cybersecurity. With a computer engineering background, he can dive into the details of crypto complexities to make crypto adoption easy for everyone. In his free time, he often reads fiction or enjoys a good laugh over a beer.

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