Ledger fiasco: Bitcoin community in an uproar
Ledger Recovery introduces a dubious feature that rattles the Bitcoin community.
Ledger Recovery introduces a dubious feature that has the Bitcoin community buzzing.
Ledger Recover is a forthcoming wallet feature that, to put it mildly, causes headaches within the Bitcoin community. The core function of this "security" feature is to split the seed phrase, also known as the secret security key for your cryptocurrencies, into three parts and store them encrypted in the cloud.
Once you do that, you break one of the main Bitcoin rules: never hand over your private keys! A second rule that’s widely regarded as crucial for Bitcoiners is also in play with Ledger Recovery: privacy. Because to activate Ledger Recovery you must verify your identity, as the company notes on its homepage.
This has Bitcoin enthusiasts scratching their heads. In relevant Reddit threads, the approach by the hardware wallet maker is described as one of the "biggest failures" in crypto history. But why would Ledger do something like this?
Reasons for Ledger Recovery
As shown in several tweets from Ledger CEO Pascal Gauthier, the service is optional. The idea is to make Ledger accessible to the masses. Gauthier talks about 100 million future users who could more easily make the jump into the Bitcoin world with the new service.
What seems worrying at first glance for hardcore Bitcoiners starts to look more reasonable on second thought. After all, the mandatory personal responsibility to store your seed phrase yourself can deter many. And no one can help Bitcoin users if they lose their seed phrase.
Facts about Ledger Recovery
Here are some hard facts about Ledger Recovery to clear up misconceptions:
- The feature is optional, no one is forced to use Ledger Recovery.
- It costs $9.99 per month
- According to Ledger, all three companies that hold seed phrase shares have strong security measures of their own. If just one is compromised, it would be useless for attackers.
- Ledger Recovery requires unique personal attributes that are randomly changed each time they’re requested, making them extremely hard to spoof.
Doubts swirl in the Bitcoin community
If you follow the discussions on social media, it quickly becomes clear that despite these facts, doubts and astonishment persist in the Bitcoin community. One argument points to rising security concerns from the cloud solution.
One thing is certain: temporary damage to Ledger’s reputation is inevitable. However you view the new feature, the hardware maker has its hands full right now trying to set things right.
