Bitcoin Forum

I read and saw a lot of people who forgot their bitcoin wallet keys. Could there be a bitcoin wallet that has a key recovery feature someday?

Yes I know if there is a recovery feature then it definitely requires kyc or credentials like email. On the one hand this might make the account owner not completely anonymous, but it is necessary for double security. What do you think?

It certainly does. Store your seeds or your private key. Anything other than that requires a participation of a third party and is susceptible to identity theft.

Allowing any recovery process that requires any personal information of the user would result it being a custodial wallet. In that case, just use CoinBase.

Technology is fast advancing but seriously i doubt if there will ever a better way to recover keys without recovery software holding something important to that wallet. To recover something you have to prove ownership, and that means saving that stuff on that platform and they provide you with possibly pins to access it. If you look at it now this still looks more dangerous then saving it offline, because not only could the software or wallet be compromised and exposing your keys, the pin provided to locate that keys are still at the risk of being lost just like the keys it self.

So I don’t think there will ever be a thing that would actually make you to recover keys without having to hold on to something more important on there serve which still brings the fear of losing through centralization

Yes that's right, this will lead to the involvement of a third party. Does any mechanism like this always allow third parties to access our keys? maybe an encryption method or some other method can be used so that these third parties still can't figure out our key?

Yes, maybe if the email link is okay, we can create fake email data to keep the data safe

 I think it is a feature of the custodial wallets.   this would never be possible for non custodial (decentralized) wallets as it would be followed by a lot potential risk. if we remember very well bitcoin was designed to be fully decentralized and a trustless system where users have control over their keys and funds. creating such mechanism would definitely go against the whole idea of a decentralized system.

as long as it involves recovering a private key it will also be accompanied by the involvement of a third party. they will be responsible for such activities where they store users data in their cloud storages putting everyone's funds at risk.

Alternatively rather than implementing a direct key recovery mechanism another approach could be to encourage users to adopt secure backup practices.   And providing different ways to securely save wallet keys the risk of permanent key loss could be reduced, without compromising the decentralized nature of non-custodial wallets.

In that case we would be back where we started, meaning you'd have to now protect your encryption key and if you forget that key there won't be any way to recover your private keys or wallet anymore! You may think that remembering a password is easier but that's a mistake because if it is easy to remember, it can be weak and can be broken which means low security.

Besides, relying on third parties defeats the purpose of Bitcoin and not only it lacks privacy it is also less secure.

Nope. If they have the access to grant you your own key, they essentially own your key.

The closest thing to trustless storage would be a client side encryption but that'll be complex to implement for it to be truly trustless. It is far, far easier for the user to just make their own backups of their key. Its that simple.

I think multisig+timelock is the answer for key recovery

https://bitcointalk.org/index.php?topic=5441806.0

There are a lot of people who have lost their Bitcoin wallets because they didn't follow the proper steps to secure their wallets. It's as simple as writing it on paper and storing it somewhere you or those you trust can only access it. There shouldn't be a problem if people followed the proper steps like it's their fault for not backing it up. Most wallets, IIRC, have the appropriate instructions when generating private keys.

There's no use in having a key recovery feature someday if it's susceptible to possible hacking etc. It should be just you or a way to remember those important keys.

If use multi-sign, when one of the keys is lost, can still open the wallet?

If it's 2-of-3 multi-sign, then you can still access the wallet when only 1 key is lost, but not if 2+ keys lost

Thank You. It seems I have found a solution to my anxiety.