Cryptographic wallets are an essential tool to securely store and maintain users’ secret keys and consequently their funds in Blockchain networks. A compelling approach to construct such wallets is to share the user’s secret key among several devices, such that an adversary must corrupt multiple machines to extract the entire secret key. Indeed, many leading cryptocurrency companies such as Coinbase, Binance, or ZenGo have started offering such distributed wallets to their customers. An important feature of a cryptographic wallet is its compatibility with the so-called BIP32 specification, the most widely adopted standard for cryptographic wallets. Essentially, BIP32 specifies the notion of a hierarchical deterministic wallet, which allows to create a key hierarchy in a deterministic fashion. Unfortunately, despite significant interest, no practically efficiently solution for a fully distributed wallet scheme, that also follows the BIP32 standard, exists. In this work, we show the first concretely efficient construction of a fully distributed wallet that is compliant with the BIP32 standard. To this end, we first provide a game-based notion of threshold signatures with rerandomizable keys and show an instantiation via the Gennaro and Goldfeder threshold ECDSA scheme (CCS’18). We then observe that one of BIP32’s key derivation mechanisms, the so-called hardened derivation, cannot efficiently be translated to the threshold setting. Instead, we devise a novel and efficient hardened derivation mechanism for the threshold setting that satisfies the same properties as the original mechanism as specified by BIP32. As a final contribution, we evaluate our solution with respect to its running time and communication cost.

Cryptocurrency networks crucially rely on digital signature schemes, which are used as an authentication mechanism for transactions. Unfortunately, most major cryptocurrencies today, including Bit-coin and Ethereum, employ signature schemes that are susceptible to quantum adversaries, i.e., an adversary with access to a quantum computer can forge signatures and thereby spend coins of honest users. In cryptocurrency networks, signature schemes are typically not executed in isolation, but within a so-called cryptographic wallet. In order to achieve security against quantum adversaries, the signature scheme and the cryptographic wallet must withstand quantum attacks.

Cloud storage is becoming increasingly popular among end users that outsource their personal data to services such as Dropbox or Google Drive. For security, uploaded data should ideally be encrypted under a key that is controlled and only known by the user. Current solutions that support user-centric encryption either require the user to manage strong cryptographic keys, or derive keys from weak passwords. While the former has massive usability issues and requires secure storage by the user, the latter approach is more convenient but offers only little security since encrypted data is susceptible to offline attacks. The recent concept of password-authenticated secret-sharing (PASS) enables users to securely derive strong keys from weak passwords by leveraging a distributed server setup, and has been considered a promising step towards secure and usable encryption. However, using PASS for encryption is not as suitable as originally thought: it only considers the (re)construction of a single, static key -- whereas practical encryption will require the management of many, object-specific keys. Using a dedicated PASS instance for every key makes the solution vulnerable against online attacks, inherently leaks access patterns to the servers and poses the risk of permanent data loss when an incorrect password is used at encryption. We therefore propose a new protocol that directly targets the problem of boostrapping encryption from a single password: distributed password-authenticated symmetric encryption DPaSE. DPaSE offers strong security and usability, such as protecting the user's password against online and offline attacks, and ensuring message privacy and ciphertext integrity as long as at least one server is honest. We formally define the desired security properties in the UC framework and propose a provably secure instantiation. The core of our protocol is a new type of Oblivious Pseudorandom Function (OPRF) that allows to extend a previous partially-blind query with a follow-up request and will be used to blindly carry over passwords across evaluations and avoid online attacks. Our (proof-of-concept) implementation of DPaSE uses 10 exponentiations at the user, 4 exponentiations and 2 pairings at each server, and has a server throughput of 76 account creations and 37 (user authentication followed by) encryptions per second, when run between a user and 2-10 servers.

In many cryptocurrencies, the problem of key management has become one of the most fundamental security challenges. Typically, keys are kept in designated schemes called wallets, whose main purpose is to store these keys securely. One such system is the BIP32 wallet (Bitcoin Improvement Proposal 32), which since its introduction in 2012 has been adopted by countless Bitcoin users and is one of the most frequently used wallet system today. Surprisingly, very little is known about the concrete security properties offered by this system. In this work, we propose the first formal analysis of the BIP32 system in its entirety and without any modification. Building on the recent work of Das et al. (CCS '19), we put forth a formal model for hierarchical deterministic wallet systems (such as BIP32) and give a security reduction in this model from the existential unforgeability of the ECDSA signature algorithm that is used in BIP32. We conclude by giving concrete security parameter estimates achieved by the BIP32 standard, and show that by moving to an alternative key derivation method we can achieve a tighter reduction offering an additional 20 bits of security (111 vs. 91 bits of security) at no additional costs.

Most blockchain solutions are susceptible to quantum attackers as they rely on cryptography that is known to be insecure in the presence of quantum adversaries. In this work we advance the study of quantum-resistant blockchain solutions by giving a quantum-resistant construction of a deterministic wallet scheme. Deterministic wallets are frequently used in practice in order to secure funds by storing the sensitive secret key on a so-called cold wallet that is not connected to the Internet. Recently, Das et al. (CCS'19) developed a formal model for the security analysis of deterministic wallets and proposed a generic construction from certain types of signature schemes that exhibit key rerandomization properties. We revisit the proposed classical construction in the presence of quantum adversaries and obtain the following results.

In cryptocurrencies such as Bitcoin or Ethereum, users control funds via secret keys. To transfer funds from one user to another, the owner of the money signs a new transaction that transfers the funds to the new recipient. This makes secret keys a highly attractive target for attacks, and has lead to prominent examples where millions of dollars worth in cryptocurrency have been stolen. To protect against these attacks, a widely used approach are so-called hot/cold wallets. In a hot/cold wallet system, the hot wallet is permanently connected to the network, while the cold wallet stores the secret key and is kept without network connection. In this work, we propose the first comprehensive security model for hot/cold wallets and develop wallet schemes that are provable secure within these models. At the technical level our main contribution is to provide a new provably secure ECDSA-based hot/cold wallet scheme that can be integrated into legacy cryptocurrencies such as Bitcoin. Our construction and security analysis uses a modular approach, where we show how to generically build secure hot/cold wallets from signature schemes that exhibit a rerandomizing property of the keys.