Yeah, I had no idea this was a "feature" Envoy offered...
Since most users have iCloud Keychain or Android Auto Backup enabled, the seed is automatically synced to your other iOS or Android devices – fully end-to-end encrypted, without needing to give Envoy permission to access your iCloud or Google account.
I'm sorry, but this is horrible. You reduce the security of your seed phrase, and therefore all your coins, to the security of your Apple or Google account, which in many cases is only a simple password (and often a leaked or reused one at that!) or an insecure 2FA method which can be fairly easily
intercepted such as SMS. I would also wager that the subset of users who feel they cannot use a seed phrase properly and would back up their seed phrase to the cloud overlaps pretty heavily with the subset of users who have substandard account security or general security practices.
Is this in any way usable with a Passport, or is it confined to Envoy only?
This is absolutely only possible for Envoy's mobile wallet seed, and not ever possible for Passport's seed. Those are *very* different threat models, and Magic Backups only make sense for a mobile wallet with a small amount of funds. As this is all open source anyone can verify this, but due to Passport's airgapped nature there isn't even a way to easily do this if you wanted to (and of course we don't want users backing up there Passport cold wallet seed into the cloud).
This approach is a great fit for onboarding new users with small amounts, and we both always allow seed export from the app and will be adding prompts to have people backup their seed phrases separately down the road after onboarding as well for full sovereignty. Magic Backups are 100% optional and 100% open source, no one has to use them, and those who opt-in can only use them with Envoy's mobile wallet portion which should of course only be used for small amounts!
Apologies for the confusion there, I could have been clearer with the language used!
Can you provide clarification on the question I asked above? I don't have a Google or Apple account and have no intention of ever creating one, but is it really as simple as if someone accesses your username/email and password, then they can recover your Envoy wallet and steal your coins?
It is not that simple, as both accounts should be protected by 2FA. In reality an attacker would need to compromise your Apple/Google email and password, as well as SIM swap you (assuming you used SMS for 2FA). If the user does not have 2FA, then yes, their account could be logged into on a new device owned by the attacker, Envoy installed, and then funds swept as the seed is stored end-to-end encrypted and secured with their account.
If a user has hardware key or TOTP 2FA enabled than it would be practically impossible without a sophisticated spear phishing attack.
And remember this is only for a mobile wallet, and can never be for cold storage! So ideally users just have spending money in this wallet. If a user's Apple or Google account was 100% compromised for this (they would have to be able to fully login and setup a new device with their account) they would have larger problems, as they are also likely storing their bank login etc. within the same storage mechanism as we are using.
The issue with adding any other secret on top of their Apple/Google account is that you're back to square one with needing to have the user record a secret and verify it before they can start using a Bitcoin wallet. Magic Backups provide a sane and open-source alternative to that flow that does not give up custody and does not give up privacy, but it does of course change the attack vectors over a standard seed phrase backup.
That is why we will always have the option for a user to generate or import a seed phrase and leverage a manual backup, but we wanted more of an in-between solution that maximized security as much as possible while greatly simplifying the onboarding flow for new users.
Digital or online/cloud backups as replacement for physical offline copies of seeds isn't and shouldn't become any sort of standard in the future. If it was Ledger that had something like that, everyone would lose their mind. I understand it's optional and you don't have to use it, but it's a dangerous option to have.
Agreed that this is certainly something that would be a bad idea for cold storage seed phrases, and differs heavily from Ledger in that it's only for hot/mobile wallet and all code is 100% open source and verifiable. There is no need to take our word for it, unlike Ledger, and we would love any code review and comments from those who have the time and expertise!
We feel that Magic Backups can greatly aid onboarding new users to Bitcoin in a way that is drastically easier, without giving up custody and with an easy path to a more standard seed backup once they're comfortable with that. Once a user backs up their seed, we also have the functionality directly in Envoy to delete their seed from their Apple/Google account and delete their app data (we never store their seed, even encrypted) from Foundation's servers, if they so choose.