The tale of the wallet / Nicolas Consigny

Transcript

all right so hello everyone my name is Nico I'm devil at Ledger and today we embark on a retrospective Journey Through the evolution of blockchain wallets in this narrative we will explore how wallets evolved over the last 14 years or so so we have quite a lot of history to go through so let's get started fellow Italians welcome to the tale of the wallet so our Story begins in the digital realm the 9th of January 2009 in a country called sourceforge a mysterious individual or group dropped a piece of software that was about to make history

this day Mark the verse of the first blockchain Bitcoin very soon this blockchain became a rock star spreading around the world carried by The Winds of freedom in hopes of decentralization a lot of the noise focused around the blockchain itself but much less around the wallets its key component everyone wanted to talk about the blockchain but to interact with the blockchain you need a wallet and unluckily for our Pioneers the wallets at the time were pretty rough Bitcoin core was offering random key generation which means you had to backup a lot of keys if you didn't want to lose your

coins but hey Bitcoin QT at your back Bitcoin QT was the first the first graphic interface to use the Bitcoin wallet client and by default it was caching 100 Keys um in a pool of Reserve key so yes you might have understood Bitcoin QT at your back only if your back wasn't very large and unfortunately the Pioneers had very large bags so thousands of keys were lost at the time oh three years later in 2012 a night of the digital realm named Peter arrived with a new system it was called the ip32

it was a standard which uses elliptic curve mathematics to allow one to calculate a set of private key from a unique private key without riddling it this unique private key is called the master from this master you can generate a three-like structure of child Keys which has its own address that can be used to send and receive coins here you go so the main benefits of vip32 is that you only need to remember or backup one key the master key and when needed you can derive the child keys and their

public address all this without needing to store each individual key pair so now instead of having to store hundreds of Secrets you only need it to store one this was an amazing jump forward for the wallet security and user experience it allowed thousands of people to enjoy the powers of blockchain but even more interesting for us today is the process through which Peter this night went through in order to pass this proposal basically he identified a problem within the wallet system that was currently in place and this proposal didn't happen in one day actually

many people discussed tested it tried to break it so it can be seen as a battle in Victory it was Battle tested I would say so Peter was the first Knight to came Victorious from a great battle he inspired many others to follow his pass and improve the wallet system so this marks the beginning of the wallet Improvement Journey and this tell is their story the story of the Brave Knights that gave their Sweat and Tears to help us protect our secrets the following year in 2013 a group of Four Knights came in the digital realm their name were Marek Pavel Aaron and

Sean they came to improve the system that was in place they were very familiar with pipe 32. but they realized it lacked something for human interactions even if Peter made it much easier to store your master key it was still looking like something 5 HQ HK tr8 so yeah not very ideal to communicate or to explain to someone that's not into cryptography Mass adoption was not going to happen with this very long alphanumeric keys so they went to the battlefield with a new horse and this horse was behip 39.

the ip39 described the implementation of a mnemonic code or mnemonic sentence it's basically a group of words that are very easy to remember for the generation of deterministic wallet um basically what vip39 does is that it turns your master private key into a set of words that are chosen from a list of 2048 words you might think oh but I'd like to choose my own words I'd be able to remember it more easily But first you shouldn't try to do it because this makes you very vulnerable to what we call the five dollar wrench attack

and second humans are very bad at choosing words or password so if I were to let you choose your word in this room we would probably end up with similar phrases such as vitalik is great and Stark net is going to scale to 10 000 X so there we got our night table basically it's where the legend rests after the battle and exchange ideas about how to improve the system even further most of those discussions those very early discussions happened on The Forum Bitcoin talk you can still find them and you might find some deadlinks but thanks to web

archive and Wayback machine you can dig some very good gems inside this discussion for example you might find the fact that vitalik used to work on a browser extension a Bitcoin wallet called crypto kit and 2013 was a very prolific year for the wallet Journey once again American Pebble went to the battlefield to propose a new standard which has been widely implemented the ip44 allows the handling of multiple coins multiple accounts external and internal chains so here external chains and internal chains refer to the utxo system

internal chain is the basically chain of change addresses it's the addresses that shouldn't be seen outside the wallet and external addresses is the chain of receiving your dress the one you use to receive your con and so forth you can have millions of address per chain so VIP as your back even if you're back pip 144 as you're back even if your back is extremely large for the derivation pass it's basically like a treasure map this treasure map is going to give you indication about where your coins are stored so the derivation password ec60 so it makes you it makes it easy for you to

find your ethereum that are stored somewhere on the island and the same year but this time in the Physical Realm a few people decided to drastically improve the security of wallets this is the beginning of the hardware wallet era so the thing is computer are not secure they are not made to store secrets you can be one of the best developers in the world with a one of the most complex scheme to hide your secrets on your laptop or in various server you are still an easy target compared to a five years old child that is storing a secret on a secure element

a very good example of this is the hack of Luke Dash Jr which is one of the Bitcoin core developer even though he's a very talented developer and he has a very very good understanding of blockchain and wallets he got his coin almost all of his coin drained this year because he was throwing secrets on a computer so what's the secure element it's basically a small chip or a small computer if you wish that has been designed to store secrets and to be protected from unauthorized access it can run a limited set of applications and what you can see here on top is the hw1 the very first Hardware wallet with a smart card

it's a piece of history and now what we have is what you see down the newest version of the Nano s the Nano S Plus we have sold about 3 million Nanos making it the most widely used Hardware wallet in the world and those devices load millions of people to enjoy the power and blockchain and to sleep in peace without having to worry about the security of their digital assets there is no such thing as perfect Hardware security and there will never be security Hardware security is a journey it's actually more like an infinite battle that's why we have the dungeon the dungeon is the security team

at letter they are very talented hackers that are always trying to break things and they do break things they broke Hardware wallets that were not using secure elements they broke software wallets that used poor cryptographic implementations each time they find something they do what we call responsible disclosures so they get in touch with the owner of the system that was found and they explained the vulnerabilities in order for the system to get patched so not only they attack but they also protect the overall ecosystem security they also continuously review vulnerabilities submission on the ubunti program and thanks to this Ubuntu

program they improved Ledger security if you find one of those you can be featured in the hall of fames where all the Gladiators that found vulnerabilities on The Ledger Stacks are featured you can find some really cool hacks here such as the authentication bypass on the hw1 the very first wallet that I've shown you earlier and yes the some very great names here and if there is one Gladiator that should be mentioned in the history of Hardware wallets should be this guy bitty chip is the co-founder of Ledger he is an expert in Hardware wallet security and

mostly in smart card BT chip has been in the arena for decades actually even before Bitcoin was there very often when you hear about successful business story we tell you you need to find a problem and to design a product to solve that problem while BT chip is not one of those he had the product for years he was just waiting for the use case so for years he was doing running small code on Smart cards it was used for many different purposes such as advertisement so you had this little smart card that you could plug and it would show you an

advertisement which is a quite lame use case for such a technology right but hey then came Bitcoin and since then he has a great use case and he's still standing here in the arena so if you feel like it go try to fight him and then we arrived to the ethereum wallet history so a few years later the first ethereum wallet was named ethereum wallet or missed it was built by the foundation the ethereum foundation it was the wallet that launched the token standard known

as erc20 it was a browser wallet but building a wallet is very hard that's what the ethereum foundation realized and the major issue with this wallet was the necessity to sync a node in order to use the wallet which was not so difficult at the beginning but as the chain grew it became very impractical and also it was built on electron which is a great framework to build a desktop app or web apps it's built for apps that run their own trusted JavaScript code but when you are building a browser by definition you are running random code from people

all around the world so this is quite tricky that's why the ethereum wallet missed was discontinued in favor of the new wallets that were appearing at the time and that were very successful such as my ether wallet Mysore wallet you probably know it it's a very famous and very good product it was made by Taylor the Knight you can see here she was the co-founder at my ether wallet I think she's doing security at metamask nowadays she built a great wallet experience one of the first actually to integrate with ledger so it was the first way of supporting

ethereum on a hardware wallet in history and today she still spends her time and her weekend trying to help the ecosystem security by investigating hacks and trying to help people not to get wrecked so I see I'm soon running out of time so I'm gonna go to account obstruction so basically the new Knights the new paradigm shift in the wallet Improvement Journey this year you probably have heard a lot about account obstruction and my bet is that you're gonna hear more and more about icons abstraction in the following months years account abstraction is a very

interesting concept where external EOS are not there anymore but we have the wallet Logic on chain on contract it allows programmable actions it allows many things it allows session Keys recursive payments social recovery and so forth and so on so it's a huge paradigm shift I invite you to join the 4337 Mafia if you want to learn more about it and there is an amazing GitHub repo called 43 37 Mafia awesome account obstruction where we list all the different cool stuff that are being

built on account abstraction and remember when I told you that vip32 allowed thousands to onboard and to enjoy the powers of blockchain then the hardware wallets allowed Millions to join and to enjoy the powers of blockchain while very likely account abstraction will allow billions to join and to enjoy the powers of blockchain it's going to be a huge Paradigm it it's not there yet there is no second mempool yet for now it's still better so it's time to build it

and if you wanna write your name in The Tale of wallets it's probably where you have to go and one of these little smart contract wallets is probably going to change our industry so will you build one and write your name in the tail of the wallet thanks for your attention it was a pleasure [Applause] I think we have some times for questions I'll take some questions please focus on the presentation and not other things I already have enough trouble with things

I think I know about and I don't know anything about recover all right thanks a lot for the speech was very interesting so my question is so we're building the the security layer for wallets so basically to help to fight against scams and the question would be do you think that for example what metamask is doing now that they're offering the plugins like a security plugins for for for wallet users do you think it's the gonna be integrated with the wallets further so the wallets will

be working on this cam protection tools or it will be kind of more as a separate solutions that will have kind of you know their own customer base a very good question so actually I think it's going to be a bit of both like the simulation transaction tools are really useful and are able to prevent some scams I think um especially for Hardware wallet the future is going to be a combination of both do simulations tools and clear signing on the device so basically once you have both those things you're pretty safe um so yeah to answer your question I see I see a good future for

transaction simulation tools and uh we are yeah currently exploring uh some of the solutions any other questions nope all right thank you very much [Music]