Recovery agents, license to…
*Make sure you’ve read Part I to get up to speed on smart contract accounts.*
One of the biggest risks with blockchain-based accounts is a complete loss of funds. If you lose your private key (password) or your device — and you haven’t safeguarded your backup seed phrase — then your funds are lost forever.
The infamous case of the QuadrigaCX exchange made headlines around the world earlier this year when the CEO suddenly died at the age of 30. As the sole owner and proprietor of the keys to all the exchange’s assets, he took $137 million worth of cryptocurrency with him to the grave. His unfortunate demise is an extreme example and telling reminder of blockchain’s impenetrable security and self-sovereignty.
In traditional finance, if we forget our login details, are hacked or even make a transactional error, banks and organisations are able to assist us.
In a decentralised system, mistakes are usually irreversible. This may seem a daunting prospect, but it is also an inherent, defining and celebrated feature of blockchain — only you have access to your private keys and therefore are in total control of your funds. No other person, institution or government is able to dictate or influence your finances. It is true financial liberation, yet this freedom should not weigh so heavily on users.
We want to protect users against this Catch-22, making the Pillar Wallet as loss-proof as possible, while still ensuring only users are in total control of their private keys.
With our new smart wallet upgrade, you will be able to assign recovery agents to help keep your private key safe, so your funds are always recoverable.
Recovery agents are trusted individuals, third-parties and/or secondary devices (such as hardware wallets) that you nominate to help you recover access to your Smart Wallet if you lose your device or master key. You can assign these recovery agents with different permission levels for accessing your key.
With social recovery, for example, you can select five trusted friends or individuals to each store a broken up piece of your key. No single person will have the entire key, and you only need three out of your five to fully recover it. You could even grant permission to a Pillar contact to lock your wallet account in the case of an emergency.
Custodians, such as a hardware wallet provider, will have full responsibility in keeping your entire private key safe.
This is just one of the ways we’re making your Pillar Wallet as secure and user-friendly as possible.