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Tangem Wallet Unveils Novel Solution for Safety in Web3: Introducing Seedless Storage

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Fri, 06/10/2022 - 09:00
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Vladislav Sopov
Three-card system by leading cold wallet producer Tangem eliminates the need for seed phrases, here’s how
Tangem Wallet Unveils Novel Solution for Safety in Web3: Introducing Seedless Storage
Cover image via www.freepik.com

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Tangem Wallet, a veteran provider of hardware cryptocurrency storage solutions, eliminates the need for the most sophisticated building block of wallet security, i.e., the seed phrase.

Its seedless solution sets a new benchmark for hardware wallets in terms of usability and attack resistance.

Tangem Wallet offers seedless hardware crypto storage system

Since its launch in 2017, Tangem Wallet offers “smart banknotes,” i.e hardware cryptocurrency wallets that look exactly like credit cards.

It developed a solution that allows crypto holders to use a backup system that totally replaces seed phrases as a security mechanism for users’ cryptocurrency.

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Image by Tangem

Why does this approach make sense?

  • Typically, crypto users do not actually store seed phrases in safe places: malefactors can easily access them and recover their funds;
  • Fraudsters only need to take a photo of the seed phrase to access a crypto wallet;
  • Vast majority of crypto hacks become possible due to compromised seed phrases;
  • Authorization through a seed phrase on a new device is yet another dangerous attack vector;
  • Scammers of all sorts compromise seed phrases through sophisticated social engineering attacks.

Here is why the next-gen solution by Tangem Wallet is “seedless” for crypto holders: it takes all of seed phrase management’s heavy lifting.

What is a crypto wallet

A cryptocurrency wallet is a software or hardware solution designed to receive, store, send and (in some cases) convert digital assets (cryptocurrencies or cryptos) amongst each other. Crypto wallets do not store crypto tokens physically; they are used to authorize operations with the coins stored on this or that wallet.

There are centralized and decentralized (noncustodial, self-custodial) cryptocurrency wallets. With centralized ones, public and private keys from a wallet are managed by some service, e.g., Binance or Coinbase.

In decentralized wallets, no one can access a user's funds; he/she is solely responsible for private key management. However, if the password is lost, crypto can only be restored through a seed phrase: the team of decentralized wallets cannot help in this situation.

What is a seed phrase and why do we need it

A seed phrase (also backup phrase, recovery phrase, mnemonic phrase or mnemonic seed) is a combination of English words utilized to access cryptocurrency wallets. This phrase is generated automatically by every noncustodial wallet once a crypto account (even with a zero balance) is created.

Seed phrases include a series of 12 or 24 simple words (like “fact,” “door,” “tiger,” “move” and so on). This generation is unique and cannot be replicated; every wallet (the combination of public and private keys) has its own seed phrase.

Through a seed phrase, we can recover access to the account even on new devices or through different wallet software.

Why using a seed phrase is no longer the best option

While a seed phrase used to be a reliable recovery and safety protection mechanism for cryptocurrency wallets, with the maturation of the crypto segment, it has demonstrated major drawbacks. First and foremost, it can easily be lost forever: an owner can simply forget both the phrase and the place he/she stores its physical copy.

Also, scammers invented new techniques to gain access to seed phrases through a combination of hacks, private key scams, key-loggers and social engineering attacks. If a scammer gains access to the seed phrase, the crypto wallet cannot change it, so his/her wallet can be attacked at any time.

How Tangem Wallet allows users to store crypto without saving seed phrases

Tangem Wallet, a leading hardware cryptocurrency wallet producer, offers a system that makes manual storage of seed phrases on the user’s unnecessary.

How it works

Tangem Wallet generates private keys without exposing seed phrases to users. This means that the “write down the seed phrase” step can be skipped while creating a cryptocurrency wallet on the user’s side.

The owner of a Tangem Wallet can just sign up for the application, activate the wallet and clone a backup phrase to his/her “cards” before starting to use them as hardware cryptocurrency wallets.

Three cards for better security

What is special about this system is its way of creating a backup mechanism. Not unlike multi-signature wallets for DeFis and DAOs, it clones the keys to three different cards. Once the wallet is activated, the keypair cannot be restored from the wallet even if the scammer manages to steal it physically.

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Image by Tangem

This security design is truly a bullet-proof one: if one card (or even two cards) is lost, the client of Tangem Wallet can continue utilization of his/her wallet. Every card is protected by a password, so scammers will not be able to utilize them for their cryptocurrency wallets.

Tangem Wallet: Where security meets usability

Incorporated in Zug, Switzerland - the world’s most influential fintech hub - Tangem Wallet offers industry-level solutions for cryptocurrency storage. Its cold wallets, “smart banknotes,” are equipped with Common Criteria EAL6+ chips, the most protected chips on the market, as of 2022. Its technical design leverages the benefits of Elliptic Curve Cryptography. Leading cybersecurity vendor Kudelsky audited its codebase.

Tangem Wallet is a user-friendly product; a polished UX/UI makes it the most suitable option even for cryptocurrency newbies. Tangem “cards” have built-in NFC modules for unmatched usability worldwide.

Unlike the majority of modern noncustodial cryptocurrency wallets, Tangem Wallet is a blockchain-agnostic one. It is designed to store Bitcoins (BTC), Ethers (ETH) and 14 different altcoins; 5 new cryptocurrencies will be added in the coming release.

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Tangem Released New-Gen Hardware Wallet: What Is Special About It? Comprehensive Review

Its Wallet Connect module is seamlessly compatible with 100+ decentralized applications and decentralized finance protocols (DeFis), including the likes of Uniswap, OpenSea, 1Inch and Zapper. This allows Tangem clients to lend/borrow crypto assets, mint stablecoins and trade against AMMs without leaving the application.

The Tangem Wallet team developed a specific solutions kit for crypto-friendly businesses and engineers enabling them to strengthen the security and usability of their systems by integrating new-gen hardware wallets with seedless backup procedures.

Bottom line

Tangem Wallet, an industry-leading hardware wallets producer, offers seedless solutions for the storage of Bitcoin and major altcoins. It eliminates the need for saving seed phrases on a computer or as a physical copy.

Tangem allows you to copy the backup key on three independent cards: scammers are not able to recover them even if one of the cards is stolen. Also, a crypto holder can operate his/her cryptocurrency with at least one valid Tangem “smart banknotes.”

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About the author

Blockchain Analyst & Writer with scientific background. 6+ years in IT-analytics, 3+ years in blockchain.

Worked in independent analysis as well as in start-ups (Swap.online, Monoreto, Attic Lab etc.)