Thank you for your reply Tobias,

I don't think that the chicken-egg scenario is relevant, but please let me explain why:

Wallet A = seed words (A) - add minimal funds as a canary/sacrificial wallet

Wallet B = seed words (B) - add minimal funds as a canary/sacrificial wallet

Wallet AB = seed words (A) + 'quantum' passphrase using seed words (B) - add 1/2 of main funds

Wallet BA = seed words (B) + 'quantum' passphrase using seed words (A) - add 1/2 of main funds

If the backup plate containing seed words (A) is compromised, then minimal funds are taken.

If the backup plate containing seed words (B) is compromised, then minimal funds are taken.

Both backup plates must remain geographically separated.

Furthermore, backup plate (A) could be held by a 1st party, whilst backup plate (B) could be held by a 2nd party, as part of a 2 of 2 multi-factor (or multi-sig) setup.

I hope this clarifies everything.

Regards,

Chris

On Sun, 9 May 2021, 23:54 Tobias Kaupat, <Tobias@kaupat-hh.de> wrote:
Hi Chris,
thanks for the clarification. It makes sense so far.

About the "chicken - egg" problem:
When you generate a BIP39 mnemonic "A" without password, you get a Seed "As" from which you derive your private key.
Using the same mnemonic with a passphrase will give you a different seed "As*" with a different private and public key.
Now your process must look like:
- Generate mnemonic A without password (will never be used)
- Generate mnemonic B* using words from A as password
- Generate mnemonic A* using words from B* as password

That's just an implementation detail but might have impact on the actual process, depending on the wallet you are using.

Hope it's clear.

Kind regards
Tobias



BitPLATES (Chris) <bitplates@marketnetworks.co.uk> schrieb am So., 9. Mai 2021, 10:29:
Hi Tobias,

In answer to your questions...

"Isn't your suggestion already covered by BIP39 since there is not restriction in how you choose your passphrase?"

- Correct, my idea is covered by BIP39, and therefore compatible with BIP39... I see the 'quantum' passphrase as an optional 'soft fork' leading towards a more restricted choice of characters, rather than the fuller, less restrictive choice of characters.

"It's up to any user to choose his password like you propose. I see your proposal more like a way to choose my password rather than anything that needs to be implemented somewhere."

- Correct also, my proposal is for an Informational BIP to educate users how to create a 'quantum' passphrase, which provides the same high degree of protection (2048^23 combinations) as the original 1st layer mnemonic seed words. Should their 24 seed words be compromised (or posted on the internet), this extreme level of protection would make it impossible to brute-force the wallet without the 'quantum' passphrase.

"Don't I have plausible deniability already with any other password that I keep in mind, since the seed without the password is already a valid address?"

- No, because an unrestricted passphrase may contain characters different to those allowed by the 'quantum' passphrase. Memorisation of the 2nd layer passphrase is very dangerous, whereby, an unfortunate accident could leave your family without access to their inherence. The 'quantum' passphrase encourages the use of multiple metal backup storage devices, but anything more that A-Z (upper case only), would not be disguised as a 24 word seed. Therefore, discovery of a backup device with the extra, unrestricted characters that don't also open a (sacrificial) wallet, will be recognised as a 2nd layer passphrase... This is when the $5 wrench is brought to the table to extract the 1st layer seed words. 

"One issue might be, that the passphrase is part of the mnemonic. A hardware wallet needs the passphrase to generate the complete mnemonic (changing the password does change the resulting seed). Thus you get a chicken-egg problem, at least for some implementations. Probably you could use the restore feature to work around this - but it's one step more that should be mentioned."

- I'm not sure that I fully understand this last paragraph of your email, but just to be clear, the 'quantum' passphrase is made from the 24 seed words of a separate wallet. This is essentially the 2nd layer (or 2nd signing key) to add to the 1st layer (or 1st signing key) required to complete the full mnemonic, which then provides access to the passphrase-protected wallet.

eg. The 1st Bitcoin wallet is protected by a 'quantum' passphrase, containing the seed words of the 2nd Bitcoin wallet; inversely, the 2nd Bitcoin wallet is protected by a 'quantum' passphrase, containing the seed words of the 1st Bitcoin wallet.

Thank you for your thoughts.

Regards,

Chris


On Sun, 9 May 2021, 08:24 Tobias Kaupat, <Tobias@kaupat-hh.de> wrote:
Hello Chris,
Isn't your suggestion already covered by BIP39 since there is not restriction in how you choose your passphrase?

It's up to any user to choose his password like you propose. I see your proposal more like a way to choose my password rather than anything that needs to be implemented somewhere.

Don't I have plausible deniability already with any other password that I keep in mind, since the seed without the password is already a valid address?

One issue might be, that the passphrase is part of the mnemonic. A hardware wallet needs the passphrase to generate the complete mnemonic (changing the password does change the resulting seed). Thus you get a chicken-egg problem, at least for some implementations. Probably you could use the restore feature to work around this - but it's one step more that should be mentioned.


Kind regards
Tobias




BitPLATES® (Chris) via bitcoin-dev <bitcoin-dev@lists.linuxfoundation.org> schrieb am Sa., 8. Mai 2021, 17:21:
Hi,

I'd like to submit an idea for review, as a potential informational BIP (Bitcoin Improvement Proposal), describing an optional method of producing a BIP39 passphrase, using only BIP39 'mnemonic' seed words.

The idea specifically refers to a method of introducing two-factor authentication, to protect a Bitcoin wallet using only 24 seed words, and therefore, providing plausible deniability about the existence of this separate 2nd layer passphrase.

I've suggested the name 'quantum' passphrase to be used casually as a unique identifier.

The data stored within a 'quantum' passphrase, is simultaneously the minimum required data for reproducing a BIP39-compatible 24-word seed mnemonic... hence, the name 'quantum' seems fitting, to reflect the multiple simultaneous states of data.

Abstract...

This improvement proposal describes the use of twenty four, newly generated BIP39 seed words, to produce a '25th-word' BIP39-compatible 'quantum' passphrase.

Two-factor authentication (2FA) or (2 of 2 multi-signature) can be implemented with a two-wallet setup:

The 1st Bitcoin wallet is protected by the seed words of the 2nd Bitcoin wallet; inversely, the 2nd Bitcoin wallet is protected by the seed words of the 1st Bitcoin wallet.

The 'quantum' passphrase offers an exponential increase in the level of protection, as that offered by the original BIP39 mnemonic seed words (≈2048^23 possible combinations).

ie. A Bitcoin wallet with a 2nd layer 'quantum'passphrase is protected by 2048^23 to the power of 2048^23 possible combinations.

With existing computer capabilities, this level of protection is far greater than required; however, this does provide a sufficient level of protection for each separate layer of a two-factor Bitcoin wallet, should any one layer be accidentally exposed.

This method of passphrase generation, consists of two parts:

1st - generating the BIP39 mnemonic seed words, using a BIP39-compatible hardware wallet.

2nd - Converting these seed words into the 'quantum' passphrase, following four simple rules, which most importantly, do not destroy the integrity of the initial data.

Motivation...

The well established practice of preserving up to 24 seed words for the purpose of reproduction of a Bitcoin wallet, suffers from a major flaw... Exposure of these mnemonic seed words can cause catastrophic loss of funds without adequate multi-factor protection.

Whilst it is recognised that a number of multi-factor solutions are available (including the standard BIP39 passphrase, and hardware wallet multi-signature functionality), this proposal aims to provide an extremely safe and secure 'low-tech' option, that requires minimal (non-destructive) adjustments to the seed words.

Furthermore, the 'quantum' passphrase offers a number advantages over the existing methods of multi-factor protection:

Firstly, this method of creating a passphrase leaves no evidence of its existence on any backup devices, providing plausible deniability in case of coercion.

This is because the passphrase is easily created from a genuine 24 seed word mnemonic; therefore, the physical backup of the passphrase can be disguised as a simple Bitcoin wallet on a metal backup plate.

It presents a way of discouraging user-created words or sentences (also known as 'brain-wallets'), which often provide a drastically reduced level of passphrase security, unbeknown to many users.

The large amount of data required to produce a 'quantum' passphrase (up to 96 characters long), encourages the physical backup of the passphrase.

Furthermore, the use of BIP39-only words provides a higher degree of standardization, which can help to avoid potential mistakes made by creating unnecessarily complicated combinations of letters, numbers and symbols. Increased complication (disorderly, and non-human-friendly), does not always equal increased complexity (orderly, and more human-friendly), or increased security.

As previously mentioned, a two-wallet configuration provides the user an opportunity to safely split the two factors of protection (equivalent to a 2 of 2 'multi-sig' setup).

If a BIP39-compatible passphrase is created using a new set of 24 seed words, it provides 76 degrees of extra complexity (ie. 1 with 76 zeros, or 10⁷⁶ possible combinations of words).

The strength of this 2nd factor solution, provides adequate risk-management, when considering the production of multiple backup devices, strategically stored in multiple geographical locations.

Generating the 'quantum' passphrase...

Following just four (non-destructive) BIP39-compatible rules, the 24 seed words can also function as a 'quantum' passphrase:

1 . Only BIP39 words
(Standard list of 2048 English words - other languages should be compatible)

2 . Only the first four letters of each word
(BIP39 words require only this data for reproduction)

3 . Only upper case letters
(All alphabet references use this standard format)

4 . No spaces between words
(Spaces represent an additional unit of data, that is not recorded)

In essence, the 'quantum' passphrase is simply a single string of all 24 seed words, set out using the above rules.

I welcome a productive technical discussion.

Thanks,

Chris Johnston


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