Paper 2017/704

A Key Backup Scheme Based on Bitcoin

Zhongxiang Zheng, Chunhuan Zhao, Haining Fan, and Xiaoyun Wang

Abstract

Since first introduced by Satoshi Nakamoto in 2008, Bitcoin has become the biggest and most well-known decentralized digital currency. Its anonymity allows users all over the world to make transactions with each other and keep their identities hidden. However, protecting private key becomes a very important issue because it is the only access to a unique account and can hardly be recovered if missing. Storing an encrypted backup of private key and its corresponding advanced key is a traditional but effective way, and many other techniques help to make the backup harder to obtain by attackers. While in this paper, we introduce a new backup scheme that can provide protection when an attacker manages to obtain the backup. It is based on Bitcoin system and ECDSA signature scheme. The biggest difference is the generation and recovery of the backup processes are both related with some specific transactions on blockchain, thus it creates a gap for legal users and attackers who manages to obtain backup to recover key. The gap is decided by the number of accounts and transactions on the blockchain which increases rapidly with the growth of Bitcoin's popularity and therefore strengthens the security of our scheme at the same time. What's more, our technique can also be combined with former ones to achieve better security.