Design of a Secure Hardware Wallet for Cryptocurrency

Abstract

The blockchain technology has potential applications in various areas such as Internet of Things (IoT), land registry, smart contracts, virtual identity, supply chain management and medical data. As the number of Blockchain projects is growing rapidly the challenges, motivations and the needs of Blockchain users remain a concern. Therefore, the primary objective of this study is to combat the security challenges and cater to the needs of
Blockchain users.
The first phase was utilized to study the Blockchain and Bitcoin perspectives and challenges. Some say ”Bitcoin works in theory, not in practice”. The reasons being slow
transactions, high energy requirements, drug trafficking, terrorist funding etc. The situation of Blockchain is similar to the Internet in 90s when many bashed Internet saying it was only used for drug trafficking. Some communities have failed to discover the novelty of
Blockchain like decentralization of economy, censorship resistance, irreversibility and more.
The second phase was utilized to develop a secure hardware which stores the mnemonic seed phrase in a decentralized manner. The seed phrase is used to derive the master private key and public key of the user’s Blockchain wallet (as defined in BIP39). In the designed
hardware wallet the seed phrase is essentially divided into multiple shares using Shamir’s Secret Sharing Algorithm. The shares are then stored inside multiple Java Cards which contains EMV chips which stores the shares securely. When a minimum number of Java Cards are combined they produce the mnemonic phrase. After that user can derive it’s wallet master private key and public key and go ahead with the transaction on the Blockchain.