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Purpose of this session

To improve the Wallet Governance Study Report

Purpose of the report

Provide a comprehensive overview of the current state, challenges, and future directions of wallet governance, policy, and key management. ��

�

Table of contents��

�

This presentation

Presentation by Mitchell

Restricted within the BGIN IKP-WG

First, I‘ll explain the purpose of this session.We at the Identity Key management and Privacy-Working Group are writing the Wallet Governance Study Report (and accountable wallet report). It's a collaborative effort on Google Docs, and anyone can view and comment on it from the BGIN website.

The purpose of the report is roughly as follows. To provide (読み上げる)

I've provided the table of contents for this report on the right side. Today I will be presenting chapter 7 which discusses the various key management types of blockchain wallets.

%After my presentation, Mitchell will explain chapters 8 through 10 which addresses challenges posed by the convergence of different use-%cases. For example, financial, governance, and identity functions without single wallet interfaces.

We hope to improve this report through today's meeting.

まずはこのセッションの目的を話します．

IKP-WGでは，ウォレットのガバナンスに関するレポートを執筆しています．このペーパーはGoogle documentで共同執筆しており，BGINのホームページからどなたでも閲覧とコメントができます．

レポートの目的をざっくりと述べると，～です．�こちらがレポートの目次になっています．７章でデジタルウォレットのさまざまな形態を調査しています．そのなかで，特にブロックチェーンウォレットのさまざまな鍵管理形態について書いているセクションがあります．私からはこのセクションについて説明します．

8-10章では，～について書いています．このあとMitchellからここらへんやこのぺーぱーのまとめの説明をしていただきます．今日のこの場を借りてペーパーをよりよいものにできたらと思っています．

This study report, produced by the IAM, Key Management and Privacy Working Group of BGIN (Blockchain Governance Initiative Network), aims to provide a comprehensive overview of the current state, challenges, and future directions of wallet governance, policy, and key management. As wallets become increasingly central to our digital lives, understanding their complexities and implications is crucial for developers, businesses, regulators, and users alike.

The report explores various types of digital wallets, from custodial and non-custodial solutions to hardware, software, and biometric implementations. We examine how these wallets function across three key domains:

Financial Technology: Analysing wallets as tools for managing digital assets and facilitating transactions.
Governance Tools: Investigating the role of wallets in decentralized decision-making processes and protocol management.
Identity Management: Exploring the emerging use of wallets as secure repositories for digital identities and credentials.

Throughout this study, we highlight the intricate balance between security, usability, and privacy that wallet designers and users must navigate. We also address the challenges posed by the convergence of financial, governance, and identity functions within single wallet interfaces, including regulatory complexities and potential risks.

By offering insights into best practices, emerging technologies, and potential future developments, this report aims to contribute to the ongoing dialogue about responsible innovation in the blockchain space. Our goal is to provide stakeholders with the knowledge needed to make intypeed decisions about wallet implementation, use, and regulation in an increasingly decentralized digital landscape.

As we continue into this complex subject, we invite readers to consider the transtypeative potential of well-governed wallet systems, as well as the responsibilities that come with managing the gateways to our digital lives and assets.

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Purpose of this presentation

To improve the key management section of the report

The purpose of the section and the purpose of today's presentation is to

Achieve a common understanding of the importance of key management�
Deepen customers‘ understanding of wallets with various key management types �
Share information about biometric key management and lay the foundations for future discussions ←Hear opinions from various standpoints

Restricted within the BGIN IKP-WG

The purpose of this presentation is to improve the key management section of the report.

There are three main objectives of this section.

・First, we want to Achieve~

・Second, we want to deepen consumers' understanding of wallets with various key management types, such as multi-sig wallets, hardware wallets, and smart contract wallets.

・Finally, we want to share information about biometric key management, which is currently not widely used but has been the subject of recent research. I would like to hear what you think about biometric key management from various standpoints.

まずは私から，ブロックチェーンウォレットの鍵管理に関するセクションについて説明します．

この節の目的は，主に３つあります．

・みんながウォレットにおける鍵管理の重要性を理解すること

・色々な鍵管理形態のウォレット，例えばマルチシグウォレットやハードウェアウォレットやスマートコントラクトウォレットに対する消費者の理解を深めること

・まだ普及していないが最近研究や実証がされている生体情報を使った鍵管理について共有し今後の議論を進めること

です．

今日はこのセクションの内容を簡単にさらいます．

そして，３つ目についてもみなさんから開発者目線でも消費者目線でもバイオメトリックウォレットについてどう思うかなどを聞きたいです．

それでは内容に入っていきます

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The role of keys in blockchain wallets

A blockchain wallet is a tool for managing and trading cryptocurrency or NFTs
Digital signatures are used to generate valid transactions

Access rights to signing keys = rights to transfer assets

This section deals with how to manage signing keys in a wallet

Restricted within the BGIN IKP-WG

Let's review the role of keys in blockchain wallets.

A blockchain wallet is a tool for managing and trading cryptocurrency or NFTs.

Digital signatures are used to generate valid transactions.

A wallet account is linked to a key pair consisting of a signing key and a verification key.

The verification key functions as a wallet address and you can think of it like an account number.

On the other hand, the signing key functions like a password and is used to sign the contents of a given transaction.

In other words, access rights to a given signing key means having the right to transfer those signed assets.

For example, if a third party gains access to your signing key, they will be able to steal your assets, and if you lose access to your signing key, you will no longer be able to access the assets linked to that wallet.

For this reason, the management of signing keys is important for blockchain wallets.

While wallets generate, store, and manage various things besides the signing key, this section focuses solely on the managing of the signing key.

So, what specific requirements are there for signing key management?

まずブロックチェーンウォレットにおける鍵の役割について確認しましょう．

ブロックチェーンウォレットは，仮想通貨の管理や取引を行うためのツールです．

ユーザは，デジタル署名を活用して仮想通貨の正当な所有者であることと取引内容への同意を証明することで，送金や取引を実行します．

ウォレットアカウントには２種類の鍵からなる鍵ペアが紐づきます．署名鍵と検証鍵です．

検証鍵はウォレットアドレスとして機能しアカウント番号のようなものです．

一方，署名鍵はパスワードのように機能し，取引内容にデジタル署名を付与するのに用います．

すなわち，署名鍵へのアクセス権は資産の移転権を意味します．

例えば，第三者があなたの署名鍵にアクセスすれば資産を盗まれますし，あなたが署名鍵へのアクセスを失えばそのウォレットに紐づいている資産にアクセスできなくなり，実質的に資産を喪失します．

そのためブロックチェーンウォレットにおいて，署名鍵の管理は一般的な課題です．

では具体的に，鍵管理についてどういう要件が必要でしょうか？

co'nsent

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Key management considerations for blockchain wallets

Security

Is there a risk for the unauthroized access of signing keys?�E.g. Who is the management entity? What is the management medium? What is the access control method for signing keys?

Availability

Is the key accessible even in the event of a failure?�E.g. Cases include whether the storage device will be damaged, whether an internet connection is required, whether the management entity will continue to provide the service.

Convenience

Are there any mental or financial costs involved in managing keys?�E.g. Are there too many steps? Do you need to buy expensive dedicated devices?

It is difficult to balance security, availability and convenience of key management.

→Choose the appropriate key management method (wallet type) according to use case and desired functions.

Restricted within the BGIN IKP-WG

We have identified three main points to consider. These are:

security, availability and convenience.

In terms of security, the key question is whether or not there is a risk for the unauthroized access of signing keys.

More specifically, various factors are involved, such as Who is the management entity? What is the management medium? What is the access control method for signing keys?

In terms of availability, the key question is whether or not the user can access their signing keys even in the event of a failure.

Cases include whether the storage device will be damaged, whether an internet connection is required, whether the management entity will continue to provide the service

These two are particularly important in terms of access rights to assets, but when it comes to practical use for consumers, convenience is also important.

By convenience, we mean whether or not there is any mental or financial costs involved in managing keys.

Purchasing expensive dedicated devices or having to go through multiple authentication steps for every small transaction can make it difficult to use.

In general, it is difficult to achieve a balance between security, availability and convenience. Therefore, consumers are required to choose an appropriate combination of wallet types according to their use case and desired functions.

Next, we will move on to the explanation of the wallet types listed in the report.

我々は大きくわけて３つを考慮点としてあげています．

安全性，可用性，利便性です．

上の二つは資産へのアクセス権に関するものです．

安全性は鍵に不正アクセスされないかということで，具体的には，鍵の管理主体が誰であるかや，その管理主体の管理能力，鍵の認証あるいは認可方法などのさまざまな要素が絡みます．

可用性は，ユーザが鍵にアクセスできる状態にあるかということで，管理媒体のタンパ性や，管理主体の管理継続性などの要因が絡みます．

資産のアクセス権という意味ではこの２つが特に重要ですが，ユーザが実際に使うとなると利便性も欲しいです．

利便性とは，その鍵管理に，精神的経済的な負担が大きくないか？ということです．

高級な専用デバイスの購入や，小さな取引の都度何段階も認証を行うのは利用のハードルが上がってしまいます．

一般的には，安全性，可用性，利便性の両立は難しいです．ですので，消費者は鍵管理の重要性を認識したうえで，ユースケースや求める機能や好みに応じて適切なウォレットタイプの組み合わせを選択することが求められます．

つづいて，ペーパーでリストアップしているウォレットタイプの説明にはいっていきます．

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Types of Blockchain wallets

Custodial wallet / Non-custodial wallet

Classification by management entity

Software wallet / Hardware wallet

Classification by management location

Multi-sig wallet, MPC (Multi-Party Computation) wallet

Types with enhanced key redundancy

Smart contract wallet

A type that is directly manipulated by a program implemented on the Ethereum chain�

Biometric wallet

A type that uses biometric information for key management

Restricted within the BGIN IKP-WG

There are various ways to classify wallets, and this report summarises eight types.

The classification of custodial and non-custodial wallets is based on the key management entity.

The classification of software and hardware wallets is based on the location of the key.

Multi-signature wallets and Multi-Party Computation wallets are wallets that use redundant secret information. This increases security and availability compared to wallets where a single key is linked.

Smart contract wallets are wallets that automate transactions using programs on Ethereum.

These wallets are probably most familiar to everyone here.

For information on security, availability and convenience of key management for each type of wallet, please refer to the report. �We will now explain the biometric wallet defined by the IKP-WG. This is a type that uses biometric information for key management. While the concept has not been widely used, we think that this type of wallet will become established in the future.

ウォレットの分類方法はさまざまありますが，本レポートではこれら８種類のウォレットタイプについてまとめています．

カストディアルウォレットとノンカストディアルウォレットは鍵管理主体による分類です．

ソフトウェアウォレットとハードウェアウォレットは鍵の管理場所に関する分類です．

マルチシグウォレットとMPCウォレットはウォレットに紐づく秘密情報を冗長にした形態です．これにより，単一の鍵が紐づくウォレット形態と比較して安全性と可用性が高まります．

スマートコントラクトウォレットは，イーサリアム上のプログラムによって取引を自動化する形態のウォレットです．

これらのウォレットはみなさんに馴染みのあるものでしょう．

各形態の鍵管理の安全性，可用性，利便性についてはレポートを参照いただくことにします．あるいは資料の最後に書いているので時間があれば軽くさらいましょう．

ここではIKP-WGが定義したバイオメトリックウォレットについて説明します．これは鍵管理に生体を使う形態で，ウォレット製品自体もこの概念もまだ普及していませんが今後一つのカテゴリとして確立されうるものだと捉えています．

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Biometric wallet (as defined by IKP-WG)

Biometric wallet is a generic term for wallets that use biometric information for key management

Biometric-locked… Use biometric information to activate the key
Biometric-bound…Use biometric information as a substitute for the key

Motivation for biometric key management

Biometric information has strong binding with its owner and is easy to use.

We never lose it.
No one can steal it.
We can’t lend it to someone else.

Restricted within the BGIN IKP-WG

Now, let's talk about these biometric wallets.

In the report, we define biometric wallets as a general term for wallets that use biometric information for key management.

Within this, we define two types of biometric information usage: biometric-locked and biometric-bound.

The locked type uses biometric information to activate the key. One example is a FIDO-type wallet.

The bound type uses biometric information as a signing key. Although it is not yet widespread, various technologies make this possible, such as the fuzzy commitments and fuzzy signatures that are being researched.

The motivation for biometric key management is nearly identical to using biometric information for authentication.

This is because biometric information has strong binding with its owner and is easy to use.

Specifically, this is because biometric information has the following three properties. We never lose it. No one can steal it. And we can’t lend it to someone else.

ではバイオメトリックウォレットについて話します．

ペーパーでは，バイオメトリックウォレットとは，鍵管理に生体情報を使うウォレットの総称として定義しました．

そのなかでも生体情報の用途で2つの形態，biometric-lockedとbiometric-boundを定義しました．

前者は生体を鍵のアクティべーとに用いる形態です．例えば，FIDO型のウォレットや，カストディアルウォレットで生体認証により鍵認可を行う形態をイメージしていただければよいと思います．

後者は生体を署名鍵のように用いる形態です．まだ普及していませんが，Fuzzy commitmentやFuzzy Signatureといったこれを実現するさまざまな技術が研究されており，実証などもされつつあります．

生体情報を鍵管理に用いるモチベーションは認証に生体情報を用いるモチベーションとほとんど同じです．

生体情報は所有者との紐づきが強いものであり，ユーザにとって使いやすいものであるからです．具体的には，生体情報が次の３つの性質を持つからです．なくさない，盗まれない，貸せない．

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Common features of Biometric wallets

Security

Security depends on the accuracy of biometric authentication.
In practice, there is a risk of impersonation through copied photos or videos.

Preventing this requires system-level enhancements.

Availability

If biometric information input is mandatory, there is a single point of failure.
Biometric information cannot be used in some situations such as damage to biometric features or environmental factors like lighting.

Highly convenient�
Issue of privacy

Biometric information is essentially personal data that does not change.��

Restricted within the BGIN IKP-WG

In this slide, we summarise features common to biometric-locked and biometric-bound wallets.

First relates to security. Obviously, security depends greatly on the accuracy of the biometric authentication.

If the accuracy is not good enough, there is a risk of impersonation using copied photos or videos. Preventing this requires system-level enhancements such as presentation attack detection, digital injection mitigation and AI based threat detection.

In terms of availability, if biometric information input is mandatory, the single point of failure becomes the mechanism to input that information.

For example, there is a possibility that biometric information cannot be used or does not function. This can be due to injury or environmental factors.�

In terms of convenience, it is highly convenient. This should not need explanation. But if necessary, you simply hold your finger or face over the input device, and it is that simple.

On the other hand, there are concerns about privacy. Because biometric information is difficult to change, it is necessary to consider where to extract and store biometric information, and in what state to store it in. For example, states include photos, feature vectors, and encryption.

Up to this point, we have talked about the common features of biometric wallets. Next, we will explain the difference between locked and bound types.

このスライドでは，バイオメトリックウォレットに共通の，すなわちlocked boundに共通の特徴を整理しました．

まず安全性についてです．当たり前ですが，安全性は採用する生体認証の精度に大きく依存します．さらに，実際には，写真や動画によるなりすましリスクがあります．

これについてはシステムレベルの対策が求められます．例えば，～．

可用性については，生体情報の入力が必須となる方式の場合単一障害点が存在します．

そして，生体情報が使えないあるいは機能しない場ことが起こり得ます．例えば，けが，環境的要因．

利便性は高いです．これは説明不要かもしれません．モーダルによって差はあるものの，単に指をかざす，顔をかざすだけでよく長い文字列を記憶する必要などがありません．

一方，プライバシの問題が懸念されます．生体情報は変更の難しい生体情報であるため，生体情報をどこで抽出するか，保管するのか，どんな状態で保管するか（写真や特徴量や暗号化）などを考えて設計する必要がありますし，ユーザも理解する必要があります．

ここまで，バイオメトリックウォレットに共通の特徴を話しました．次はlockedとboundの違いを説明します．

Biometric information cannot be used in some situations due to damage caused by accidents or injuries, or environmental factors such as darkness for a face captured without additional lighting.

biometric information is essentially personal data that does not change., once compromised, the system may be unusable. Therefore, both the entity managing the biometric information and the entity presenting the biometric information need to consider the privacy aspects.

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The difference between "Locked" and "Bound" wallet

The strength of the binding between the key and the owner

Example of Biometric-locked wallet��

�

Example of Biometric-bound wallet��

�

Wallet App.

Signed transaction

Wallet App.

2.Activation

1.Matching

＝

There is still a risk of unauthorized use or �loss of the key.

No confidential information is stored.

Weak binding

Strong binding

Restricted within the BGIN IKP-WG

The main difference between the two types are the strengths of the binding between the key and the owner.

An example of a locked wallet is shown on the left and an example of a bound wallet is shown on the right.

We will start with an explanation of the locked type.

The user places their fingerprint on the device. If the authentication is successful, the stored key on the device gets activated. This key is then used to generate a signature. While activating the key becomes easier, storing the key on the device poses risks. These include the likelihood of hacking and the potential loss of the device. In this context, the binding can be considered weak.

Users need to trust the key management operator. As a countermeasure, the signing key can be encrypted and stored in the cloud, then restored each time at the user's end. Another countermeasure would be to combine this system with MPC or multi-signature.

Next we'll explain the bound type.

The user input their fingerprints information into the device, and a signature is generated from their biometric features. The information required to generate the signature is not stored anywhere,so it is hard to forge signature without the user's biometric information. In this sense, it can be said that the binding is strong. Since the keys are not stored online, the biometric-bound wallet has the same level of security as a hardware wallet. In addition,since the wallet does not require a special device to use, it is also more convenient than a hardware wallet.

Although there are differences in the strength of the binding between the key and the owner in this way, the degree to which the key is used to identify a user differs depending on the use case, so it is necessary to make a choice accordingly.

この２つのウォレットは，鍵と所有者の結びつきの強弱が異なります．

左にろっくどウォレットの例とを書いています．

ユーザは端末に指紋をかざし，認証が通れば端末で保管している鍵がアクティベートされ，その署名鍵で署名が生成されます．鍵のアクティベートは楽になりますが，鍵がデバイスなどで保管されるので俄然ハッキングリスクや保管デバイスの紛失リスクが存在します．その意味でバインドが弱いと言えます．

対策として，署名鍵を暗号化してクラウドにおいておきユーザの手元で都度復元することや，MPCやマルチシグとの組み合わせが考えられます．

一方，バイオメトリックバウンドウォレットは，鍵自体や生体情報自体はどこにも保管されていないため，本人の生体を持っていないと正当な署名を生成できません．この意味でboundが強いと言えます．このように，鍵がオンラインに保管されないという意味でbound walletはHardware walletのような安全性がありながらも，特別なデバイスを必要としない利便性の高い形態と捉えることができます．

In the case of key escrow in a custodial wallet, the key management operator could in principle skip biometric authentication and use the key if no additional security measures are in place. In this sense, the biometric-locked wallet is considered as a weak binding between the key and the owner if there is no other strong security measure to mitigate misuse, for which the user would need to trust the operator.

For instance if local unlocking by biometric gives access to an encryption key (KEK) in order to retrieve an encrypted blob at custody for local decryption and local usage...

there are also solutions combining biometric unlocking and MPC for instance

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