Arcula: A Secure Hierarchical Deterministic Wallet for Multi-asset Blockchains
This addresses security vulnerabilities in blockchain wallets for users and developers, though it is incremental as it builds on existing hierarchical deterministic wallet concepts.
The authors tackled the problem of secure key management in multi-asset blockchains by introducing Arcula, a hierarchical deterministic wallet that uses identity-based addresses and provably secure cryptography, resulting in a design proven secure against privilege escalation attacks.
This work presents Arcula, a new design for hierarchical deterministic wallets that brings identity-based addresses to the blockchain. Arcula is built on top of provably secure cryptographic primitives. It generates all its cryptographic secrets from a user-provided seed and enables the derivation of new public keys based on the identities of users, without requiring any secret information. Unlike other wallets, it achieves all these properties while being secure against privilege escalation. We formalize the security model of hierarchical deterministic wallets and prove that an attacker compromising an arbitrary number of users within an Arcula wallet cannot escalate his privileges and compromise users higher in the access hierarchy. Our design works out-of-the-box with any blockchain that enables the verification of signatures on arbitrary messages. We evaluate its usage in a real-world scenario on the Bitcoin Cash network.