Comment by cesarb | Hacker News Reader

Comment by cesarb | Hacker News Reader

> I do not accept the concept of “trust”, I don’t know those guys, why should I trust them? On the other hand, with BTC trust is not even considered to be a factor.

That is a strange argument. The value of Bitcoin comes from the trust people have on Bitcoin. If nobody trusts Bitcoin, it's worthless except as a mathematical curiosity.

And after just a few more paragraphs, we see another instance of trust. The author describes leaving most of the money in a hardware wallet. That is, the author is trusting that the hardware is neither malicious nor buggy. A malicious hardware wallet could use kleptographic attacks to exfiltrate the private keys, or derive them from an attacker-controlled seed. A buggy hardware wallet could, for instance, have a "stuck" RNG (like a well-known OpenSSL fiasco), such that the generated private keys are predictable.

The author is trusting people he doesn't know: the designers of the hardware wallet, the manufacturers of the hardware wallet (including workers at whichever factory manufactures the hardware), and even the postmen. Moreover, the author is not only trusting them to not be malicious, but also to not make mistakes (with crypto, even small mistakes can be deadly).

And there's also at least one other problem the author didn't consider, or at least didn't mention: inheritance. If the author has an accident, what happens to the money? And what if the accident is not fatal, but leads to neurological sequels which render the author unable to access the hardware wallets?

Author of TREZOR here. Responses inline:

> have a "stuck" RNG

TREZOR asks for external entropy during the initialization and this one is mixed with an internal one. Even in the unlikely change that internal RNG generator fails, you should be on the safe side.

> The author is trusting people he doesn't know

The whole design is (hardware and software) is open-source. You don't need to trust, you can verify yourself (or ask a friend who can if you are not able to).

> inheritance

When you initialize device it will give you a list of 24 words, which are a way how to recover funds. You can split these words across your family members (using e.g. a Shamir's Secret Sharing Scheme) and once you are dead your family can recover your coins.

I recommend watching my talk at CCC where I explain in detail the basis concepts of TREZOR: https://www.youtube.com/watch?v=CgaBKNus1n0

>TREZOR asks for external entropy during the initialization and this one is mixed with an internal one. Even in the unlikely change that internal RNG generator fails, you should be on the safe side.

Assuming it actually uses it.

>The whole design is (hardware and software) is open-source. You don't need to trust, you can verify yourself (or ask a friend who can if you are not able to).

This doesn't matter unless you build it yourself. Open source hardware and software specs are irrelevant if you have no proof the thing you are using followed them precisely.

> That is a strange argument.

If Bitcoin was closed source, I'd agree with you.

But it's not, and I don't. Bitcoin is 100% transparent and reviewable: the code, the transactions. The same cannot be said for any national or bank electronic monetary system.

As a technical person, I'd trust an open source system more than closed source system any day of the week.

It's not that you need to trust the implementation, it's that you need to trust that the currency will remain useful and usable over time. If nobody believes that they can purchase things using bitcoins tomorrow, nobody will buy them today. There's just as much (if not more) blind trust required in bitcoin, because at least fiat currency is backed by a government. Bitcoin isn't.

The big play is requiring that taxes be paid in the fiat currency, creating a known future demand for it.

I think there are two different senses of the word "trust" being used here.

> As a technical person, I'd trust an open source system more than closed source system any day of the week.

You just said it: you trust. You trust Bitcoin because you can (and perhaps already have) review the code, the theory, the blockchain. But it's still trust, and you probably value Bitcoin only because of that trust.

Even more likely: what happens if somebody steals the hardware wallet or it gets lost? E.g. It's in a backpack that is left behind. Does the screen display the private key that you can write down on paper (hopefully correctly) as a backup?

Edit: Apparently on first use the device displays a list of recovery codes which would cover it being lost and the inheritance issue (assuming the manufacturer is still around). I'm a bit concerned the recovery is through a web based tool though:

http://doc.satoshilabs.com/trezor-user/recovery.html

Even if the manufacturer is out of business, you can still access your coins. The algorithm for creating the private key is public (BIP39, BIP32, BIP44), as is the actual firmware source code.

The recovery is through a web-based tool, but the order of the words is randomized and displayed only on the device, so even if someone installs a keylogger on your PC, he would need to know the correct order (since it's 24 words, that's safe enough).

(Disclaimer: I work for SatoshiLabs, the manufacturer.)

What happens if you lose a briefcase full of cash?

Bitcoin is like cash, not like a credit card or bank account.

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