Crypto News: Amidst the intense controversy surrounding Ledger, a prominent hardware wallet manufacturer, and its contentious firmware update, which introduces a feature enabling users to back up their seed phrases by transmitting encrypted key fragments to third-party firms, renowned founder of Cardano, Charles Hoskinson, has stepped forward to share his perspective.
Hoskinson’s Take On Ledger Update
In a tweet, Hoskinson has shared valuable insights regarding the controversy surrounding Ledger’s new firmware update, emphasizing key principles for enhancing security and trust in the hardware wallet industry. In his remarks, Hoskinson stressed the importance of open-source software that undergoes regular audits by multiple sources. By opting for audited software, Hoskinson believes users can benefit from the transparency and collective scrutiny that contribute to robust security measures.
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Simplicity has been another crucial aspect highlighted by Hoskinson, emphasizing that security often stems from minimizing the size and complexity of a system. Designing hardware wallets with a smaller footprint helps reduce potential vulnerabilities.
New Approach Towards Decentralized Updates
Discussing the significance of non-updateable firmware, the 35-year-old founder pointed out that it becomes crucial when companies make explicit security commitments. He cited Yubikey as an example of a product that follows this principle, prioritizing immutable firmware to uphold its security model. While replicating this concept in the cryptocurrency space might be challenging, Hoskinson proposed decentralizing the update process to enhance overall security.
While pointing out the purpose of hardware wallets, Hoskinson underscored that people primarily acquire them to maximize the security of their funds, rather than seeking daily usage or a user experience comparable to hot wallets. This comes as hardware wallets provide a dedicated space for private keys that are difficult to tamper with, ensuring greater protection.
Moreover, Hoskinson also drew attention to the hardware wallet industry as an extreme example of self-custody. He highlighted that while alternative methods like encrypting seed phrases and storing them in email accounts are possible, hardware wallets offer an additional layer of security by safeguarding private keys in a tamper-resistant environment.
Finally, Hoskinson emphasized the importance of not “breaking social contracts”. This principle suggests that companies should uphold the promises they make to their customers regarding security and privacy, reinforcing trust in the crypto wallet ecosystem.
With respect to the Ledger controversy, I say the following:
1) always choose open source software whenever possible that has been audited by numerous sources on a regular basis
2) security comes from simplicity- Design the smallest possible footprint
— Charles Hoskinson (@IOHK_Charles) May 19, 2023
As the debate rages on, Hoskinson’s insights were applauded by the cryptocurrency community, as ADA loyalists believed them to be valuable insights into the implications and potential risks associated with this new approach to seed phrase security. At the time of writing, the price of ADA — Cardano’s native cryptocurrency — was changing hands at $0.3704 which represents a gain of 0.37% in the past one hour.
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