Ledger is one of the most well-known cryptocurrency hardware wallet manufacturers. Depending on the needs of the users, they have a wide variety of wallet types accessible. Despite being one of the safest methods for storing cryptocurrency, hardware wallets may no longer be secure due to the availability of a new tool.
Users can subscribe to and back up their private keys using a new program called “Ledger Recover” from Ledger. The service uses a method in which the user’s seed phrase is split into three encrypted shards and provided to outside businesses.
These bits can be used to reconstitute the original seed phrase when they are put back together and decoded. However, the new functionality has not garnered the positive response that the hardware wallet manufacturer had hoped for.
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New Ledger tool draws criticism
Both security experts and many consumers have criticized the new feature. Mudit Gupta, the head of information security at Polygon Labs, tweeted about it. He emphasized the idea’s primary flaw: transmitting the encrypted [key] components to three firms so they may reassemble the keys.
Ledger just released a new update for Nano X that allows social recovery of your seed phrase.
It encrypts your seed in 3 shards and sends it to different entities that can then reconstruct the seed for you post ID verification.
It's a horrendous idea, DON'T enable this feature. pic.twitter.com/2E1GSuYN5r
— Mudit Gupta (@Mudit__Gupta) May 16, 2023
In a response sent via email to The Block, Ledger clarified that the decryption of the three shards can only occur on the Ledger device after the user has successfully verified their identity. Furthermore, it was clarified that these companies do not have access to the seed phrase as it is not stored in the cloud.