System and method of blockchain wallet recovery
Disclosed are systems and methods for recovering cryptocurrency assets which may be tied to a lost personal private encryption key. The disclosed system deploys a multi-signature wallet formed from a set of keys including the user's personal key, the key of an organization provides blockchain service for the user, and a reserve key stored by third-party escrow organization. To recover a lost user private key, the system generates and digitally signs with the appropriate private keys a blockchain transaction that includes a script configured, when executed by a node in a blockchain network, to replace the user key with a replacement key.
1. A computer-implemented method for recovering a cryptocurrency wallet, comprising:
receiving, by a first computing device associated with a cryptocurrency service provider, a request to recover, without a user key of a user, cryptographic assets attributed to a multi-signature wallet, wherein the multi-signature wallet is associated with a set of encryption keys for signing transactions comprising the user key of the user, a provider private key of the cryptocurrency service provider, and a reserve private key of a key escrow organization;
generating a blockchain transaction data structure for the multi-signature wallet, wherein the blockchain transaction data structure includes a script configured, when executed by a node in a blockchain network, to replace the user key with a replacement user key for the user;
generating a first digital signature based on the blockchain transaction data structure using the provider private key, wherein the provider private key is stored at the first computing device;
receiving, from a second computing device associated with the key escrow organization, a second digital signature generated based on the blockchain transaction data structure using the reserve private key, wherein the reserve private key is stored at the second computing device; and
transmitting the blockchain transaction data structure that includes the first digital signature and the second digital signature to the blockchain network for validation.
2. The method of claim 1 , further comprising:
responsive to receiving the request to recover the cryptographic assets attributed to the multi-signature wallet, authenticating a user using a multi-factor authentication technique.
3. The method of claim 1 , wherein the multi-signature wallet is configured using an M-of-N scheme, wherein actions related to the multi-signature wallet are authorized using at least two of: the provider private key, the reserve private key, and the user private key.
4. The method of claim 1 , further comprising:
receiving, from a user device operated by the user, a replacement public key to be associated with the multi-signature wallet; and
modifying the blockchain transaction data structure to include at least one of a copy of the replacement public key, and a value derived from the replacement public key.
5. The method of claim 1 , wherein the script of the blockchain data structure comprises executable code configured to:
verify the blockchain transaction data structure has been signed by at least the provider private key and the reserve private key;
responsive to verifying the blockchain transaction data structure has been signed, remove an association of the user key with the multi-signature wallet and add an association of the replacement key with the multi-signature wallet.
6. The method of claim 1 , further comprises:
transmitting, to a user device, a one-time password in response to the recovery request, wherein the one-time password is transmitted by the first computing device as a text message via a short message service (SMS).
7. A system for recovering a cryptocurrency wallet, comprising:
a memory device configured to store a provider private key; and
a hardware processor configured to:
receive a request to recover, without a user key of a user, cryptographic assets attributed to a multi-signature wallet, wherein the multi-signature wallet is associated with a set of encryption keys for signing transactions comprising the user key of the user, a provider private key of the cryptocurrency service provider, and a reserve private key of a key escrow organization;
generate a blockchain transaction data structure for the multi-signature wallet, wherein the blockchain transaction data structure includes a script configured, when executed by a node in a blockchain network, to replace the user key with a replacement user key for the user;
generate a first digital signature based on the blockchain transaction data structure using the provider private key associated with the multi-signature wallet;
receive, from a second computing device associated with the key escrow organization, a second digital signature generated based on the blockchain transaction data structure using a reserve private key, wherein the reserve private key is stored at the second computing device; and
transmit the blockchain transaction data structure that includes the first digital signature and the second digital signature to the blockchain network for validation.
8. The system of claim 7 , wherein the processor is further configured to:
responsive to receiving the request to recover the cryptographic assets attributed to the multi-signature wallet, authenticate a user using a multi-factor authentication technique.
9. The system of claim 7 , wherein the multi-signature wallet is configured using an M-of-N scheme, wherein actions related to the multi-signature wallet are authorized using at least two of: the provider private key, the reserve private key, and the user private key.
10. The system of claim 7 , wherein the processor is further configured to:
receive, from a user device operated by the user, a replacement public key to be associated with the multi-signature wallet;
modify the blockchain transaction data structure to include at least one of a copy of the replacement public key, and a value derived from the replacement public key.
11. The system of claim 7 , wherein the script of the blockchain data structure comprises executable code configured to:
verify the blockchain transaction data structure has been signed by at least the provider private key and the reserve private key;
responsive to verifying the blockchain transaction data structure has been signed, remove an association of the user key with the multi-signature wallet and add an association of the replacement key with the multi-signature wallet.
12. The system of claim 7 , wherein the processor is further configured to:
transmit, to a user device, a one-time password in response to the recovery request, wherein the one-time password is transmitted as a text message via a short message service (SMS).
13. A non-transitory computer readable medium comprising computer executable instructions for recovering a cryptocurrency wallet, including instructions for:
receiving, by a first computing device associated with a cryptocurrency service provider, a request to recover, without a user key of a user, cryptographic assets attributed to a multi-signature wallet, wherein the multi-signature wallet is associated with a set of encryption keys for signing transactions comprising the user key of the user, a provider private key of the cryptocurrency service provider, and a reserve private key of a key escrow organization;
generating a blockchain transaction data structure for the multi-signature wallet, wherein the blockchain transaction data structure includes a script configured, when executed by a node in a blockchain network, to replace the user key with a replacement user key for the user;
generating a first digital signature based on the blockchain transaction data structure using the provider private key, wherein the provider private key is stored at the first computing device;
receiving, from a second computing device associated with the key escrow organization, a second digital signature generated based on the blockchain transaction data structure using the reserve private key, wherein the reserve private key is stored at the second computing device; and
transmitting the blockchain transaction data structure that includes the first digital signature and the second digital signature to the blockchain network for validation.
14. The non-transitory computer readable medium of claim 13 , further comprising instructions for:
responsive to receiving the request to recover the cryptographic assets attributed to the multi-signature wallet, authenticating a user using a multi-factor authentication technique.
15. The non-transitory computer readable medium of claim 13 , wherein the multi-signature wallet is configured using an M-of-N scheme, wherein actions related to the multi-signature wallet are authorized using at least two of: the provider private key, the reserve private key, and the user private key.
16. The non-transitory computer readable medium of claim 13 , further comprising instructions for:
receiving, from a user device operated by the user, a replacement public key to be associated with the multi-signature wallet; and
modifying the blockchain transaction data structure to include at least one of a copy of the replacement public key, and a value derived from the replacement public key.
17. The non-transitory computer readable medium of claim 13 , wherein the script of the blockchain data structure comprises executable code configured to:
verify the blockchain transaction data structure has been signed by at least the provider private key and the reserve private key;
responsive to verifying the blockchain transaction data structure has been signed, remove an association of the user key with the multi-signature wallet and add an association of the replacement key with the multi-signature wallet.
18. The non-transitory computer readable medium of claim 13 , further comprises instructions for:
transmitting, to a user device, a one-time password in response to the recovery request, wherein the one-time password is transmitted by the first computing device as a text message via a short message service (SMS).