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HandCash has been working to eliminate the predominant 12-word seed system, and it has taken the first step in this journey. The Bitcoin SV (BSV) wallet announced that it’s introducing the world’s first two-factor authentication backup system for non-custodial Bitcoin wallets. The new system will reduce the chances of human error and allow the wallet to increase the account complexity, making it more secure.
HandCash has been striving to not only create the best products it can, but also to “push for new standards and better interoperability for the rest of the industry.” In a blog post announcing the launch of the system, the company referred to the constant challenge of losing your keys as a major motivation behind the system.
With the prevalent system, Bitcoin holders keep losing their private keys and effectively their tokens. The backup system in place involves the use of the 12-word system and while it has been effective for some time, there are challenges that make it quite a risk.
The company illustrated some of the challenges with this system, “We found that almost 40% of our users take screenshots of their 12 words seeds, many write down the words with typos (specially non-English speaking users) and others write down the words in cloud note services such as Evernote.”
These practices are risky and put the tokens owned by these users at risk of loss or theft. To eliminate these risks, HandCash has launched the 2FA backup system.
Once a new account is created by phone verification, a private key is generated in the user’s phone, where the account structure is allocated. The wallet gives one set of the 12 words to the user and secures the other set with redundancy and cold storage backups.
How safe? THIS SAFE!
There is 1BSV here.
This screenshot will help us recover the funds. Useless without authenticating the associated phone number.
With other wallets by doing this you are 100% fucked. Here you have a second layer.
1st step towards going fully Keyless. https://t.co/IARuUHfHUy pic.twitter.com/47Gd7n9RYJ
— Alex Agut (@apagut) October 22, 2019
It’s important to note that “HandCash can never access the full private key where the account structure is allocated, as it is only regenerated in the user’s phone after validating the phone number and the Recovery Phrase.”
The new system will drastically reduce the chances of human error which continue to lead to the loss of millions of dollars in the crypto world every year. For one, the full private key is never exposed to the user, reducing the chances of others accessing his money. Even more important is that the recovery phrase is useless without the phone validation. In cases where your recovery phrase gets leaked to malicious parties, there’s not much they can do with it as long as you still have your phone.
The system will also allow HandCash to increase account complexity. This will enable the inclusion of business accounts, family accounts and more into a user’s current account. It will also allow the wallet to enable efficient use of rotating addresses.
The company concluded, “We are laser focused on creating the best products we can, and as a small company with limited resources, we have to pick very well what to build for the long run, instead of just following the old rules of Bitcoin blindly.”
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