Yeah but your security is not safety: solving the $5 wrench attack problem - José Pedro Sousa

Transcript

[music] >> Hello. So, I don't know if I can use this to to switch now. Okay. Just the other screen, I guess. Yeah, okay. That's all right. Hello. How are you today? Uh sorry, I'm a bit slow. I had kind of mild poisoning, but uh I'll push it through. Uh it's been great so far. It's like third day. Pretty happy to be here.

So, to hear all the talks and the One thing that always comes to mind when we're talking about uh crypto in general is the kind of the the problem we have with with safety and not not just security, you know, when we're thinking about our security, always thinking about keeping our keys secure or um keeping our witnesses secure when you're doing zero knowledge proofs. Um but actually, like I have a few examples of um problems that are not fishing victims.

We also think always think about not having calls with uh people we kind of suspect. We have all of us have had this kind of experience. Some of us were hacked as well. Um and we always think always think about fishing. We forget about these kind of things. Where actually have someone with their fingers severed or uh or yeah, some fake police. It's It's all in France. I'm not going to tell a little bit why. Um Yeah, others like yeah, kidnapped founder co-founder of Ledger.

Uh and this one I actually I'm going to talk a little bit more about that. Because it was actually secured with a proper time locked wallet and still it kind of only mildly work. So, yeah, we've had like 72 cases of of of this in the last in the last year. Um, why France in particular? I guess uh, well, allegedly there was a tax employee that sold some private information, uh, which together with the leaks from several um, people so several companies kind of made this perfect storm.

So, hopefully you see by this point in time that I don't want to scare you, right? But uh, this is this is an actual problem. Um, it goes further than than security. Like all these kind of data leaks together with the public observability and all of these can kind of contribute to what's been happening in France. It's not just the the alleged allegedly tax uh, information reveal. So, how do we how do we get here? Like what happened, right?

Um, there's like mainly three three things that we chose as for for crypto basically and they kind of massively backfired in a way. We can say that Etherscan is amazing. We like Etherscan because you can see it's public verifiability. You can see everything. You send a transaction, you get a receipt, you can see it end up correctly. But also it's kind of a target list. Like if you if you are actual well, then you're you're basically saying, "Please hack me." Right? But when that comes into not just please hack me, it can be actually please kidnap me or kidnap my

kids. And then this compounds with every exchange that you ever used will sorry to say, but it will leak information. It it has already leaked and you know it. It has already leaked and you don't know it or it will leak and maybe you know it or not know it, but this will happen. And so and not just exchanges, but there's a many ways that you can be targeted as a crypto person, right?

So this is it does compound. And then we choose zero delay and no friction, no kinds of like rollbacks or anything. Um which is great. Like we we want to use it for payments, but then we forget that if you hold 1,000 ETH on the wallet, that's not the same as holding a few USDC to pay to pay for a coffee. Um So yeah, it does compound with this idea that you have someone to hold your keys, right?

Um So let's just walk the stack and see like what do we have to kind of mitigate this and what what we have done. We have zero knowledge proofs. This has to be the first one because I've been working with Noir for the last 3 years. So it's a big it's a big deal for me. Uh but I I am fully aware that zero knowledge proofs they will always terminate at the prover holding the witness. This is usually our phone. We are all happy. We say, "Oh, cool. Yeah, all my information, all my transactions are on our phone."

That's all good, but if someone points a gun to my head, I'll hand my phone, obviously, right? So, it does terminate that weakness at weakness holder. Hopefully you >> [sighs] >> Then, we have multi-sig, which is is being talked a lot, right, recently. They kind of terminated the signers in the room. When I mean the room, it's obviously not a physical room sometimes. But uh one of the one of the cases I've shown would actually was a family that had a multi-sig. And what they did was kind of simply point a gun to both sides.

And then, get the multi-sig. So, it's like uh it's still it still didn't do anything for preventing the that 1 million extortion. Then, we have MPC networks. So, all of us or some of us may know very good wallets uh solutions that use MPC. So, they actually they are custodian and you you have them in different locations. But again, they are they terminate at that different locations. Maybe it's harder to get into them, but there's always a predator again and always a human on the other side that could be coerced.

And then, finally, I mean, I I could also I could mention other solutions. These are just the kind of things that we think about when we think about holding and and keeping your secure not safe. Which would be harder wallets. We we know you try to keep your Hopefully, you keep your your most of your coins in a hardware wallet, but that also will always terminate at the person that holds them. And again, no matter if you if you keep your seed very well guarded or Uh, uh, again, if someone points a head to your again to your head, you will you will tell them whatever PIN or whatever and you'll just give them away. Right, I hope you do

that, because that's uh, I mean So, the thing as is like the common thing is like they they don't survive a wrench. Uh, like if I go with a $5 damage wrench, this is kind of a very funny classic meme. Um, that if I if I buy a $5 wrench and just hit them with with the wrench until they give them the password, that's something that currently no one is actually solving like for sure.

And uh, we're going to see that even the solution I'm going to present doesn't really solve it as well, but it definitely helps. And it has worked. That little case with the time locked wallet worked in a way. I'm going to talk about that in a second. So, this is a very it's a very old uh, XKCD. We all thought it was a joke uh, at the time. And now it's uh, it's actually not joke. It's been quite the reality for at least 72 people last year.

So, it's always physical. Like it always terminate somewhere physical. Actually, I was curious and saw how much does cost a five $5 wrench. It does not cost cost $5. So, this is this is the thing. I guess inflation coming here as I I was I was expecting $5, you know, I was like, "Okay, it's not not bad." It's it's more than that. It's but yeah, anyway. Uh, so let's go back to that time locked case, because it's it's very interesting. Um, what happened is that they had a time locked wallet. The person was I think I guess just one person had a time locked wallet. And they actually threatened him and he made a transaction.

But uh, I mean it didn't went through because it had a time lock. So, they just kidnap his wife and and son, daughter, child, I don't know. Uh wife and and child. And and just wait waited it out, which was enough to get them because the lock worked. So, they actually they actually got caught because of that because the police have had enough time to find them and to So, this is an example of a situation actually self-custody could work if you have this kind of policies. And policies is what I'm going to be talking about today in terms of like how do you keep yourself safe from $5 wrench

attack. Um so, yeah, it worked. It's not not really a pleasant situation, right? Uh but I mean it did work. Okay. So, nobody's filling this gap. Like you get chains like Aztec. Uh I'm close to the Aztec uh projects. So, I'm I'm I'm happy to to talk about like how it could potentially hide your on-chain activity. You may You may uh um select what you disclose and everything.

All good. But again, you're holding your witness in your phone. So, it it trust terminates in you. Zcash is kind of a more um less programmable way of doing it, but it's the same same thing. It all is terminates at your your um hardware key or whatever. And then something that people have been talking about uh which is stealth addresses. Uh because you want to unlink your identity to your balances. If you even If you have a lot of balance, if you have a lot of ETH, that's fine as long as it's not linked to your identity. So, again, it's the it's the mixture between Ether scan and

and data leaks that will actually put you in danger. So, no one is really here to help you if you're found and targeted. Even if you're even if you're um accounts are private. So, what happen if you could have this enforcement out of reach? Because even the time lock is within reach. Right? And if you if you if you could just uh outsource that to something instead of someone, that would be a massive win.

So, the idea here is just quite simply you put it in orbit. Okay? Uh this is a bit uh overwhelming, I guess, cuz you think satellites and everything. It's not such a big deal. So, what we do at Space Computers is we take we we enforce these policies in a TE and then we just shoot the TE into space. So, it's out of reach. So, when you execute these these policies, they execute in a TE.

And plus, you avoid the whole problem of side attacks on the TEs, which I guess some of us know that they are kind of not very reliable. But, if you put them in orbit, then they're out of reach also for these kind of physical attacks. So, with with this solution, you can actually enforce things, time lock transactions. One that I really like about time lock transactions, it's the dead man switch. Uh which is uh basically you can you can have like some kind of service that will execute a transaction if you don't talk with it every month every two months or something.

And then that's an example of a transaction that you actually don't mind if it's going to be slow, right? It's no problem. You don't mind if it takes two months to to trigger because at that point you're you're dead, so you don't care about waiting two months. But you want that transaction to eventually go through. So that's an example of a time lock transaction that basically even if you're caught even if you're targeted, whoever did it needs to wait two months until they get the transaction to to them. If if your policy is is could be even better than that.

It could allow for spending caps, which is pretty big deal if you use for example agent agentic stuff. So you kind of give your agent a wallet, but you you tell them yes, only spend you can only spend up to a certain amount. Blacklist checks, so you want to you want to be sure that um you're not transferring to a a known blacklist. And this could be blacklist from OFAC, could be your own blacklist, could be something that's dynamic. That's perfectly fine. You could also have a whitelist.

And again, these are very high value transactions. This is supposed to be better than a cold wallet. Right? It's transactions that you really really really wanted them them to be not just secure, but safe as well. Um key recovery with biometrics, so you can actually verify a zero-knowledge proof within the within the satellite. So basically you can prove that you are the person that it was you are supposed to be. So as long as you hold your passport, then you can recover the key for example, make a transaction with your passport.

Duress codes, those are like codes that look like normal codes, but they're actually not. Um another one uh geo binding is is a big deal. I I would I would be glad I would happy to have a wallet that only works in Europe. Right? So, if I if I get uh targeted at least it's not someone from North Korea that's going to uh make make a transaction on my behalf. Cuz it's like geo geo binding. So, this is a big deal. So, it's kind of yeah, absolute safety. You don't get just security, you also get this uh the the the safety. And again, this is actually interesting because in my native language, Portuguese, uh the these are the same word security and safety. They're

they're the same word. Uh we always think about one thing related with the other and this is a perfect example of where security is not safety. So, they're a composable. And especially they are composable with privacy. I I feel like I didn't talk about about privacy enough because again, Etherscan is the big idea is the biggest deal. So, you want to avoid your wallet to be out there for everyone. You need it to scan for Ethereum because you're going to you want it to actually check the state of the the state of the network. So, you want to advance state and you want to observe that.

Well, but if there's a chain that that doesn't need that to advance state, then good. Like you can actually get the privacy and you can have like a a block explorer that won't expose you as a as a asset holder. Um so, yes, you should uh conditionally disclose your assets. You should be able to choose which assets do you go uh which assets you choose uh to make private and the same for functions and everything. So, if you're used to work with Zcash for example, that's an example where your assets can be either private or public. You choose it.

We want to have out of this world security. Again, both of these are already in there. Like you can already get very good privacy. You can already very good very get very good security. It's the mixture is the one that you don't get. If they fail, then you're in physical danger. So, you want to be physically safe when you disclose your identity. It's something that's non-negotiable. And and yeah, this is why why your security isn't safety. And you actually need both of them.

You want privacy and then you want the security in order to get your safety. And the way we're solving that is a kind of a an interesting I don't dwell on how our our satellites work and I think that's there was a talk by a Philip already about that. You can always talk to me later on. It's quite hard to explain you how the actual satellites will work. How how many do we have? How we launch them? But here it's mostly about why are we doing this and why is privacy just not enough yet.

And yeah, that said, I'm I'm glad to take I'm glad to take any questions if you have it. >> Thank you very much, so do we have a [applause] question? >> [applause] >> Do we have a questions? >> Hi. Sorry, [clears throat] I didn't quite understand what are you trying to do? You're trying to put the wallet on space? How does that even like how could that be safe from, you know, like kidnapping me? If I can access my wallet, somebody force me to like what is that difference of,

you know, at all. Sorry. >> Cuz you can you can enforce policies on the wallet. So, it's not on the wallet, but on the key management, you can enforce keys you can policies you can say I I I ask the wallet to make a transaction, but this transaction will take 2 months to make. Or I'm making a I'm making a transaction, but I'm proving that I'm I'm in Portugal. So, I'm not I'm not somewhere else. I'm not I'm not in North Korea. So, I'm probably Portuguese. Uh this kind of policies you can you can enforce uh offline basically off chain. You can enforce these policies to only with the satellite. So, you don't you don't disclose the fact that you're opening a time locked wallet. If you do that in

safe, for example, you need to send a transaction and then wait. That's already give you away that you're sending a transaction and waiting. So, if you do that in a in a web 2 way, then you get out of this world privacy basically. >> Okay, any more questions, guys? Okay, so thank you very much. >> [music]