BitGo's Key Recovery Service protocol offers familiarity and new security optionsA typical concern raised by those new to bitcoin is that having no central administrator nor authority makes it too dangerous to keep substantial amounts of money in, simply because there is no one to ask for a replacement private key should they lose theirs.
While bitcoin's decentralized properties make it excellent for censorship resistance, a trade-off of that, many believe, is a lack of familiarity in the security process. While public key encryption is well documented as one of the most types in history, the general public's understanding of it is minimal, mainly because it doesn't look like the standard username and password security prompt on most websites and applications today. It's just not a familiar process, and that in itself creates a security problem, since so few understand how to be safe using it.
To present a private key “prompt” that looks like a typical password prompt on your bitcoin wallet would greatly degrade the security of it. Even if people were willing to put up with that, the process is still impossible for decentralized cryptocurrencies because there would be no one to contact for the “Forgot Password?” link, and no email address associated with your account for a new password to be sent to.
To help bridge the gap between these two systems, so that new users to bitcoin could one day see the wallet login process as something more recognizable, leading cloud wallet BitGo has released a whitepaper detailing an open source protocol that solves a lot of these issues, and gives all bitcoin holders a new option for strong wallet encryption.
In a recent blog post, platform lead Benedict Chan announced the release of a new “protocol to facilitate provisioning of public backup keys,” introducing the concept of third party Key Recovery Services (KRS). This protocol makes it easy for wallet providers to deploy multisignature wallets for their customers, where they keep one key, the customer keeps a second key, and the third key goes to a KRS of the customers' choice.
http://bravenewcoin.com/news/bitgos-key-recovery-service-protocol-offers-familiarity-and-new-security-options/
