Hardware wallets on USB pendrive

[pawanjain]

Is it even possible to create a hardware wallet and integrate it to a normal USB pendrive. I am not talking about transferring the paper wallet to USB.
I am talking about copying the code embedded in hardware wallets like Trezor and Ledger Nano S and then integrating it to USB drives.

A few questions that came in my mind:

1. The above devices have a built-in screen that protects their device with a password. Now obviously our USB drive won't have that feature. If we remove that feature and implement the other features would that be doable thing ?
2. Basically, the hardware devices are just USB drives with embedded code. Why can't it be copied and integrated on other USB drives ?
3. If it is possible why haven't we seen people doing it ?
4. Can't a hacker get hands on one of these device and manipulate the code to get access to the wallet ?
Well I do know that it is encrypted through cryptographic algorithm which makes it almost impossible to hack the wallet by manipulating the code but I would like more info on this.

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[TryNinja]

I don’t think this is easily done (or even possible). Hardware wallets are more than a flash drive with a screen. They have specific chips with cryptography functions to generate private keys, sign transactions and only transmit certain informations; while an USB flash drive is just a storage device that mounts a partition on your PC so you can store files on it. There is also a lot more on hardware wallets (like the way they are build to prevent tampering and someone from simple opening the device and getting everything that is stored there).

The closest you can get from a hardware wallet with a USB flash drive is by keeping your wallet file there and only plugging it in a safe air-gapped device to sign transactions (while offline) and later broadcast them.

[RHavar]

If I'm understanding right, here's something that kind of does what you want:

https://opendime.com/


It's not a very good model for the traditional "cold storage" type system though.

[o_e_l_e_o]

1. The above devices have a built-in screen that protects their device with a password.

The screen provides more functionality than simply providing an input method for a PIN or password. Any transaction made is displayed on the screen, both address and amount, and needs to be manually verified before it will send. This is to ensure that these values haven't been tampered with or changed by malware infecting the computer the hardware wallet is plugged in to.

2. Basically, the hardware devices are just USB drives with embedded code. Why can't it be copied and integrated on other USB drives ?

Because they're not. Hardware wallets have a chip on them known as a secure element, which provides far great security than a simple USB drive.

3. If it is possible why haven't we seen people doing it ?

You can absolutely store your wallet on a USB drive, anything from a simple list of private keys to an wallet.dat file. But it's terrible security if not encrypted.

4. Can't a hacker get hands on one of these device and manipulate the code to get access to the wallet ?

It is many orders of magnitude harder to extract private keys from a hardware wallet than it is to extract them from a USB (depending on your security), or load some malware on to the USB which will automatically run next time you unlock your wallet.

In short, wallets on a USB are doable, but security is very user-dependent.

[klaaas]

Basically, the hardware devices are just USB drives with embedded code. Why can't it be copied and integrated on other USB drives ?

No it is a embedded system that is running. For a more in depth view of the ledger nano s check out this youtube video. Very interesting and will explain why it isnt that easy as you think.

[bob123]

Is it even possible to create a hardware wallet and integrate it to a normal USB pendrive.

Simple answer, no.

I am talking about copying the code embedded in hardware wallets like Trezor and Ledger Nano S and then integrating it to USB drives.

That's not possible.

A hardware wallet consists of more than just a flash memory chip.

1. The above devices have a built-in screen that protects their device with a password. Now obviously our USB drive won't have that feature. If we remove that feature and implement the other features would that be doable thing ?

No, also you need some kind of verification which happens outside of your computer you are using to transact (preferably only on the hardware wallet itself).

2. Basically, the hardware devices are just USB drives with embedded code. Why can't it be copied and integrated on other USB drives ?

They are not. Hardware wallets have secure elements embedded which keep the secret information secure and do the signing operations.
Like your credit card. It doesn't only consist of some plastic with a small flash memory.

3. If it is possible why haven't we seen people doing it ?

Because it is not possible.
We have seen people who think it is possible, which simply just copied their wallet file onto the usb. But those people don't have a clue at all.

4. Can't a hacker get hands on one of these device and manipulate the code to get access to the wallet ?
Well I do know that it is encrypted through cryptographic algorithm which makes it almost impossible to hack the wallet by manipulating the code but I would like more info on this.

I guess you are talking about hardware wallets now (not usb sticks) ?

IF some attacker is able to flash the firmware of a hardware wallet without erasing its secret information (seed), yes.. definitely possible.
But you can't simply flash the firmware to get your own version on it without erasing all relevant data. If you would be able to do so, that would be quite a severe vulnerability (which already existed in ledgers hardware wallets, but got fixed).

If you are not able to flash the firmware, you have to somehow get the secret information out of the device with the official firmware installed.
And this is not possible, given that there are no vulnerabilities (which could always exist; especially side-channel attacks etc.. ).

[naska21]

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To "mimic" hardware wallet create bootable  USB drive   and install Kali Linux with  persistent storage. Install on that  persistence   partition  Electrum wallet. Use that USB stick  solely  offline with single purpose   to sign transactions created with watching-only copy of Electrum installed on online computer. Use QR codes to transfer unsigned/signed transactions to/from that USB stick with   cold Electrum wallet. Broadcast signed transaction via Electrum on your online machine.

[Kakmakr]

Another reason why this would be a bad idea, is because the Firmware on these devices are fulnerable and exploitable like we saw with BadUSB Malware back in 2014. The hack utilized the security flaw in the USB that allowed an attacker to insert malicious code into the USB device firmware. 

Also, why would companies like Trezor and Ledger allow people to effectively create their own hardware wallets, if their main income source are derived from the sale of these devices? This is the main reason why they are using special Cryptographic electronics in these chips to talk specifically to their software. 

[naska21]

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Offline USB sticks with Kali + Electrum are  not vulnerable. Besides they  are far  more practical for those who are  limited in budgets, not to mention their much better usability in comparison with both Ledger or Trezor.

[bob123]

To "mimic" hardware wallet create bootable  USB drive   and install Kali Linux with  persistent storage.

Not even close to a hardware wallet. Neither security- nor usability-wise.

Offline USB sticks with Kali + Electrum are  not vulnerable.

Uff.. that's a very extreme statement to make..

Anything which holds sensitive information is vulnerable. The question is.. vulnerable to what?

A system which is completely offline is not vulnerable to threats from the internet.. but that's it.
Is your computer infected with a root kit -> Doesn't matter what you boot, doesn't matter if you are offline when booting from the USB, your keys can get stolen.

Also, there is no reason to install kali if you just want to have private keys stored + bootable OS. There are better options available in this case.

Besides they  are far  more practical for those who are  limited in budgets, not to mention their usability in comparison with both Ledger or Tresor.

Practical ? Usability ?

Air-gapped wallets are one of the least-convenient wallets to use.
They might be more secure than a hardware wallet (but only with a true air-gapped computer, not a stupid bootable USB.. that idea is not even close to being as secure as a hardware wallet), but lacks lots of convenience.

[naska21]

Not even close to a hardware wallet. Neither security- nor usability-wise.

Turned upside down. Open source Linux&Electrum against  proprietorial Ledger and Trezor.  

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Is your computer infected with a root kit -> Doesn't matter what you boot, doesn't matter if you are offline when booting from the USB, your keys can get stolen.
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Not correct. Root kit  is  only a great danger to the security of  OS on machine, it has no potential to  effect CPU microcode, so OS on air-gapped USB stick remains completely unchanged even if the machine is infected.

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Also, there is no reason to install kali if you just want to have private keys stored + bootable OS. There are better options available in this case.
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Agree with this. I have used to use Kali and cited it as  example of OS.

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Air-gapped wallets are one of the least-convenient wallets to use.
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  Arguable issue.

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They might be more secure than a hardware wallet (but only with a true air-gapped computer, not a stupid bootable USB.. that idea is not even close to being as secure as a hardware wallet), but lacks lots of convenience.
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My initial post says "Use that USB stick  solely  offline" which  implies that bootable   USB with Kali + Electrum is attached to air-gapped  machine, sorry, if you didn't get that.

[bob123]

Not even close to a hardware wallet. Neither security- nor usability-wise.

Turned upside down. Open source Electrum against  proprietary Ledger and Trezor.  

Most of ledgers code is open source.
The only thing which isn't is are parts of the firmware of the secure element (due to NDAs, they are working on open sourcing everything).

Trezor, on the  other hand, is completely open source. So that's not an argument.

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Is your computer infected with a root kit -> Doesn't matter what you boot, doesn't matter if you are offline when booting from the USB, your keys can get stolen.
snip

Not correct. Root kit  is  only a great danger to the security of  OS on machine, it has no potential to  effect CPU microcode, so OS on air-gapped USB stick remains completely unchanged even if the machine is infected.

No, that's simply wrong.

Malware can infect the MBR / BIOS. Booting from a live USB does not protect against that.

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Air-gapped wallets are one of the least-convenient wallets to use.
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  Arguable issue.

Are you really trying to say that it is more convenient to use a wallet on an completely air-gapped computer than plugging in a hardware wallet to your main OS and use this as your wallet  ?

I hope that was a joke.

My initial post says "Use that USB stick  solely  offline" which  implies that bootable   USB with Kali + Electrum is attached to air-gapped  machine, sorry, if you didn't get that.

I am sorry too, that i didn't get that.
I assumed what you say has to make sense (therefore assumed that the computer is only air-gapped when accessing the wallet).. but obviously it doesn't have to fully make sense.

Why should one use an USB if the computer is completely air-gapped (all the time) ?
There is no reason to use an USB in this case.. simply use the computer (with its hard drive) then. This reduces the possible attack vectors compared to when additionally using an USB flash drive.

[naska21]

Malware can infect the MBR / BIOS. Booting from a live USB does not protect against that.

How much do you actually know about infection  of live Linux ( installed on locked USB) via compromised MBR / BIOS? I'm unaware of any occasion.

Why should one use an USB if the computer is completely air-gapped (all the time) ?
There is no reason to use an USB in this case.. simply use the computer (with its hard drive) then.

Not all the time. Air-gapped when there is a need to sign transaction and online (with USB out) when to broadcast it. (Online machine has watch-only copy of Electrum that holds no private keys).... Besides, read my initial post once more.. it is alternative  to  ppl with low budget.

Are you really trying to say that it is more convenient to use a wallet on an completely air-gapped computer than plugging in a hardware wallet to your main OS and use this as your wallet  ?
I hope that was a joke.

Nope. It was not a joke, at least from  display difference   point of view, and not only that.

[bob123]

Why should one use an USB if the computer is completely air-gapped (all the time) ?
There is no reason to use an USB in this case.. simply use the computer (with its hard drive) then.

Not all the time. Air-gapped when there is a need to sign transaction and online when to broadcast it.

If it is not air-gapped all the time, you again have the problem with the rootkit scenario.

Also.. if it is not completely offline all the time, why did you reply like this:

snip
They might be more secure than a hardware wallet (but only with a true air-gapped computer, not a stupid bootable USB.. that idea is not even close to being as secure as a hardware wallet), but lacks lots of convenience.
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My initial post says "Use that USB stick  solely  offline" which  implies that bootable   USB with Kali + Electrum is attached to air-gapped  machine, sorry, if you didn't get that.

If a computer is not air-gapped all the time, you can't call that truly air-gapped.

As i said.. truly air-gapped = good; sometimes air-gapped / sometimes online = bad.

Besides, read my initial post once more.. it is alternative  to  ppl with low budget.

The topic is not whether it is for people with a low budget or not.
The point is that this is not even close to a hardware wallet, and you made the impression that it is not much less secure than a hardware wallet.

A hardware wallet consists of a secure element which handles the signing and where private keys can not be extracted. Anything else is not a hardware wallet.

There are ways to securely store coins without a hardware wallet, yes. But you should never compare an USB flash disk to a hardware wallet the way you are doing it.

[naska21]

If it is not air-gapped all the time, you again have the problem with the rootkit scenario.

Rootkit (and any other malware) on online machine has no chance to compromise transaction signed by correct private key on air-gapped one, to be correct it can change but, such compromised trx will not be broadcasted.  Once more, read carefully all my previous post and try to comprehend them before arguing.

not a stupid bootable USB.. that idea is not even close to being as secure as a hardware wallet), but lacks lots of convenience.

u're wrong. that's all I can tell  u.

[bob123]

If it is not air-gapped all the time, you again have the problem with the rootkit scenario.

Rootkit (and any other malware) on online machine has no chance to compromise transaction signed by correct private key on air-gapped one, to be correct it can change but, such compromised trx will not be broadcasted.  Once more, read carefully all my previous post and try to comprehend them before arguing.

Compromise a transaction ? 


Your whole thinking is wrong.

If you are using the same machine for signing offline and online stuff, it is not air-gapped.

You seem to not understand the scenario at all.

I will briefly explain it to you (once. if you don't understand it afterwards.. your problem):

• You have your computer which is used to be connected to the internet which you 'air-gap' for signing transactions offline (according to you)
• This computer is infected with a rootkit
• You boot from your live USB, because you want to sign a transaction
• The rootkit gains access to all of your seed / private keys (because there are not protected by a secure element, they are just on your USB and if your live OS can access it, the rootkit can too)
• You sign your transaction
• You shut your PC down completely
• You boot your main OS and go online to broadcast the transaction
• The rootkit already has your private keys, and now with internet access, has the ability to send the private keys to the attacker
• -> You know lose all coins associated with the seed / private keys which are stored on your USB
• -> Your so-called 'mimiced hardware wallet' is proven to be not as secure as a real hardware wallet because it lacks the components which define a hardware wallet.

I hope you do understand this. Maybe read that carefully a few times, if you don't 
So, instead of posting wrong information.. try to understand the things you are talking about.

For the future: If you want to post something, log off, research for 1 or 2 hours, if still necessary to post -> post.
Your misinformation are not needed here. And if you get disabused from a misconception, accept it.

not a stupid bootable USB.. that idea is not even close to being as secure as a hardware wallet), but lacks lots of convenience.

u're wrong. that's all I can tell  u.

Yes.. thats 'all you can tell me'.. simply because you don't know what you are talking about.

[naska21]

• You have your computer which isused to be connected to the internet which you 'air-gap' for signing transactions offline (according to you)
• This computer is infected with a rootkit
• You boot from your live USB, because you want to sign a transaction
• The rootkit gains access to all of your seed / private keys (because there are not protected by a secure element, they are just on your USB
  
  

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That (in bold) means more tongue from you. You are living in a dream world  that has  no relevance to the reality. Still expecting your answer to this:

How much do you actually know about infection  of live Linux ( installed on locked USB) via compromised MBR / BIOS?

Theoretically it could be,  but practically not.

Sorry, but you didn't convince me. I don't know any cases when Linux on locked USB stick attached to air-gapped computer was compromised by malware sitting on that machine. If you give me any reference from real world  I will agree with your arguments  regarding safety of my scheme. I'm using it for more than 4 years ( no problems so far)  and intend to proceed with it.  BTW, neither  BIOS nor MBR on my machine is infected. Cheese.

[ABCbits]

To be fair, most modern OS/computer don't use MBR & BIOS but GPT & UEFI where rootkit can't infect GPT/boot sector easily since valid signature required for booting (unless you disable Secure Boot).

Regardless, it's still more secure using hardware wallet rather than use USB flash drive, especially because private keys never leave the device and signing process happen on HW wallet itself rather than on computer.

[Kakmakr]

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Offline USB sticks with Kali + Electrum are  not vulnerable. Besides they  are far  more practical for those who are  limited in budgets, not to mention their much better usability in comparison with both Ledger or Trezor.

I beg to differ.. Electrum is one of the wallet providers that are constantly under attack and we have seen this with the latest mass botnet attack that were targeted at Electrum servers and we also saw how hackers tried to get people to use "exploited" public servers. 

I have not seen such attacks being done on hardware wallets like Ledger and Trezor, so your statement is a bit wild.    Yes, hardware wallets can be hacked with physical access to the device, but you need special tools to analyse and read the encrypted data that are send. 

[naska21]

snip

Offline USB sticks with Kali + Electrum are  not vulnerable. Besides they  are far  more practical for those who are  limited in budgets, not to mention their much better usability in comparison with both Ledger or Trezor.

I beg to differ.. Electrum is one of the wallet providers that are constantly under attack and we have seen this with the latest mass botnet attack that were targeted at Electrum servers and we also saw how hackers tried to get people to use "exploited" public servers.  

I have not seen such attacks being done on hardware wallets like Ledger and Trezor, so your statement is a bit wild.    Yes, hardware wallets can be hacked with physical access to the device, but you need special tools to analyse and read the encrypted data that are send.  

All those were mostly  fishing type of attack that has potential to affect exclusively transactions signed by "hot" Electrum while trx signed by "cold" one remain immune. Hardware  wallets may  also face such attacks,   find out the last one.  It can only be assumed  what number  of devices   has been involved here.  

And, everyone,  please, understand  I'm not intended to create a bad image of hardware wallets.  I merely suggested quite efficient alternative scheme.This scheme has  shortcomings, OK, I know this,  then again,  it owns some leverage.