Re: [bitcoin-dev] Encryption of an existing BIP39 mnemonic without changing the seed

From: yanmaani@cock•li
To: Tobias Kaupat <Tobias@kaupat-hh•de>,
	Bitcoin Protocol Discussion
	<bitcoin-dev@lists•linuxfoundation.org>
Subject: Re: [bitcoin-dev] Encryption of an existing BIP39 mnemonic without changing the seed
Date: Sat, 08 May 2021 22:49:01 +0000	[thread overview]
Message-ID: <6e325fc7954d34b75e3c1cf7590d0395@cock.li> (raw)
In-Reply-To: <CAPyCnfvqVT00C2TZ86GXf856jNJqPXY0duRa1CfdCqC0ecC6xA@mail.gmail.com>

Why the existing mnemonic? If you've already dealt with unencrypted 
material carelessly, the genie is out of the bottle. And if you're OK 
with making a new one, why not just use BIP-39 passphrases to begin 
with?

If you must, it seems like a decent way to accomplish it, but raw 
SHA-256 is probably not the best choice. PBKDF2 like in the BIP-39 spec 
is tried and true, or something like scrypt. This would however change 
the storage format - you'd have to store a salt too, making your 
mnemonic bigger.

On 2021-05-05 17:32, Tobias Kaupat via bitcoin-dev wrote:
> Hi all,
> I want to start a discussion about a use case I have and a possible
> solution. I have not found any satisfying solution to this use case
> yet.
> 
> Use case:
> An existing mnemonic (e.g. for a hardware wallet) should be saved on a
> paper backup in a password encrypted form. The encrypted form should
> be a mnemonic itself to keep all backup properties like error
> correction.
> 
> Suggested solution:
> 1) Take the existing mnemonic and extract the related entropy
> 2) Create a SHA526 hash (key) from a user defined password
> 3) Use the key as input for an AES CTR (empty IV) to encrypt the
> entropy
> 4) Derive a new mnemonic from the encrypted entropy to be stored on a
> paper backup
> 
> We can add some hints to the paper backp that the mnemonic is
> encrypted, or prefix it with "*" to make clear it's not usable without
> applying the password via the algorithm above.
> 
> To restore the original mnemonic, one must know the password and need
> to follow the process above again.
> 
> An example implementation in GoLang can be found here:
> https://github.com/Niondir/go-bip39/blob/master/encyrption_test.go
> 
> Why not use the existing BIP-39 Passphrase?
> When generating a mnemonic with passphrase, the entropy is derived
> from the passphrase. When you have an existing mnemonic without a
> passphrase, any attempt to add a passphrase will end up in a different
> seed and thus a different private key. What we actually need is to
> encrypt the entropy.
> 
> I'm open for your feedback. All encryption parameters are up to
> discussion and the whole proposal needs a security review. It's just
> the first draft.
> 
> Existing solutions
> One solution I found is "Seedshift" which can be found here:
> https://github.com/mifunetoshiro/Seedshift
> 
> But I consider it less secure and I would like to suggest a solution
> based on provably secure algorithms rather than a "rot23 derivation".
> Also using a date as password seems not very clever to me.
> 
> Kind regards
> Tobias
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