Ledger nano is safe.
Topic: It is NOT secure to use hardware wallets (and it never was) - page 7. (Read 2133 times)
Honestly, the same could be said of almost ANY wallet... hardware, software, online...
Just because there aren't any KNOWN vulnerabilities in any given wallet... doesn't mean that their aren't ANY vulnerabilities in any given wallet. I'm also a little unsure about the claim that an attacker can extract private keys/seed from a hacked device.
Looking at the the specifics of Saleem's detailed explanation and Ledger's write up... it would seem that a "supply chain" attacker can essentially set the device to output a specific "known" seed... rather than using a random one. That's not really "extracting" seeds/private keys... as the attacker already knows what the seed is.
Saleem claims in his write up:
Was it simply because you could theoretically load a keylogger that logged all the key presses from you entering your PIN and BIP39 passphrase and possibly the seed that was displayed on the screen?
In any case, Ledger are claiming that an update to 1.4.1 prevents this attack vector as it removes the ability to load and spoof custom MCU firmware... I guess the usual disclaimers that NOTHING is 100% secure apply!
Just because there aren't any KNOWN vulnerabilities in any given wallet... doesn't mean that their aren't ANY vulnerabilities in any given wallet. I'm also a little unsure about the claim that an attacker can extract private keys/seed from a hacked device.
Looking at the the specifics of Saleem's detailed explanation and Ledger's write up... it would seem that a "supply chain" attacker can essentially set the device to output a specific "known" seed... rather than using a random one. That's not really "extracting" seeds/private keys... as the attacker already knows what the seed is.
Saleem claims in his write up:
Quote
Physical access after setup
This is commonly known as an “Evil Maid attack”. This attack would allow you to extract the PIN, recovery seed and any BIP-39 passphrases used, provided the device is used at least once after you attack it.
As before, this does not require malware on the computer, nor does it require the user to confirm any transactions. It simply requires an attacker to install a custom MCU firmware that can exfiltrate the private keys without the user’s knowledge, next time they use it.
However, I don't actually see any "proof" of the viability of this attack... the report write up was completely focused on how he managed to trick the Secure Element into accepting his modified MCU firmware by being able to reconstruct the image of the legit firmware by taking parts from multiple sources in the device.This is commonly known as an “Evil Maid attack”. This attack would allow you to extract the PIN, recovery seed and any BIP-39 passphrases used, provided the device is used at least once after you attack it.
As before, this does not require malware on the computer, nor does it require the user to confirm any transactions. It simply requires an attacker to install a custom MCU firmware that can exfiltrate the private keys without the user’s knowledge, next time they use it.
Was it simply because you could theoretically load a keylogger that logged all the key presses from you entering your PIN and BIP39 passphrase and possibly the seed that was displayed on the screen?
In any case, Ledger are claiming that an update to 1.4.1 prevents this attack vector as it removes the ability to load and spoof custom MCU firmware... I guess the usual disclaimers that NOTHING is 100% secure apply!
an other problem with hardware wallets is that it could be possible that user feel safe. and because of that they forget to be careful while handling with their coins. in short: hw wallets could lead to a false security.
You indeed did forget the most important and still the most secure: Bitcoin Core and all the other open source software where you download the entire blockchain and where you can encrypt the wallet.
Just a few additions:
Paper Wallets can be encrypted, which makes it more secure than cash, but still is open to a regular robbing with weapon use (Tell the password or die), but the main problem I think is that it can be destroyed very easy.
An encrypted wallet.dat fie can be renamed into Michael_Jackson-Earthsong.mp3 and you carry it around (or send it around). Place another unchanged and unencrypted wallet.dat file with a low amount for plausible deniabiity. There are other plausible deniability solutions like hidden partitions etc. Multiple backups make a file pretty much undestroyable.
Just a few additions:
Paper Wallets can be encrypted, which makes it more secure than cash, but still is open to a regular robbing with weapon use (Tell the password or die), but the main problem I think is that it can be destroyed very easy.
An encrypted wallet.dat fie can be renamed into Michael_Jackson-Earthsong.mp3 and you carry it around (or send it around). Place another unchanged and unencrypted wallet.dat file with a low amount for plausible deniabiity. There are other plausible deniability solutions like hidden partitions etc. Multiple backups make a file pretty much undestroyable.
I consider the Bitcoin Core Client is a normal hot wallet. In terms of security it is not better or worse than any other hot wallet without the full blockchain. Of course there are clients which have better security than other. but from security perspective I throw all hot wallets into the same pot.
To have a full node instead of using a SPV client is indeed better but both wallets store the private keys in a similar way so they are the same for me in this regard.
You are right that paper wallets can be encrypted, but as you also say with force from an attacker none of the available wallets/key-stores would safe your coins.
The best security is when no one knows that you own any bitcoins. And you also don't have any traces on your PC/phone which might let anyone think you have some bitcoins (like installed bitcoin clients). This could be achieved in parts with an encrypted OS running inside a virtual machine which runs the bitcoin client.
The question is always, how paranoid you wanna be to secure the bitcoins. This also depends on how much you have to secure.
Your idea to encrypt and rename the wallet.dat (security by obscurity) might only work as long as you don't need it. If you want to create a transaction from this wallet.dat you need to encrypt it and load it with the bitcoin client. And when your PC is infected with malicious software it will not help you.
Paper Wallets can be encrypted, which makes it more secure than cash, but still is open to a regular robbing with weapon use (Tell the password or die), but the main problem I think is that it can be destroyed very easy.
Also regular robbing will work in this case also,a gun pointing to your head will force you to decrypt your Core wallet or to give your paper wallet.
Ledger Nano S has a feature to protect you against a regular robbing (like tell your private key or die).
It's called Alternative Pin or Hidden Account.
How to set up and/ or recover a hidden passphrase and alternate PIN on your Ledger Nano S?
Quote from: LedgerNano
The hidden passphrase is used for two reasons
1. Protection of your 24 words recovery phrase if your accounts are behind a passphrase then you are protected.
2. "Plausible deniability" is a security feature that combats the risk of being threatened and/or forced to enter your PIN code. With this option, you can manage two PIN codes, unlocking two separate accounts:
- Your first PIN code provides access to your main wallet, like a basic account, with low amounts used for daily payments and small transactions.
- Second PIN code, linked to a specific passphrase you need to set up, opens an hidden account, to save large amounts, which will only be used occasionally. With this option, in case you are forced to recover a wallet from your 24-word backup, only the main wallet will be displayed, and the second account will remain hidden, as long as you don't reveal the attached passphrase.
1. Protection of your 24 words recovery phrase if your accounts are behind a passphrase then you are protected.
2. "Plausible deniability" is a security feature that combats the risk of being threatened and/or forced to enter your PIN code. With this option, you can manage two PIN codes, unlocking two separate accounts:
- Your first PIN code provides access to your main wallet, like a basic account, with low amounts used for daily payments and small transactions.
- Second PIN code, linked to a specific passphrase you need to set up, opens an hidden account, to save large amounts, which will only be used occasionally. With this option, in case you are forced to recover a wallet from your 24-word backup, only the main wallet will be displayed, and the second account will remain hidden, as long as you don't reveal the attached passphrase.
It works like this: You you will have 2 PIN. So if someone gets inside your house and say "give me your bitcoin or die" you can unlock just the basic wallet with your PIN. The other one is totally hidden, only unlockable with the second PIN.
This is a feature which not many users know... But pretty useful.
In my opinion, there is nothing that is 100% perfect in nature. As the time goes by, developments take place and this is how it leads to a better economy. So if there is a vulnerability in the hardware wallet, it will get rectified in the future developments. It is obviously not 100% secure but then it is way better than any other wallets. We can consider it as a best secure device to hold our cryptocurrencies.
You indeed did forget the most important and still the most secure: Bitcoin Core and all the other open source software where you download the entire blockchain and where you can encrypt the wallet.
Just a few additions:
Paper Wallets can be encrypted, which makes it more secure than cash, but still is open to a regular robbing with weapon use (Tell the password or die), but the main problem I think is that it can be destroyed very easy.
An encrypted wallet.dat fie can be renamed into Michael_Jackson-Earthsong.mp3 and you carry it around (or send it around). Place another unchanged and unencrypted wallet.dat file with a low amount for plausible deniabiity. There are other plausible deniability solutions like hidden partitions etc. Multiple backups make a file pretty much undestroyable.
I do not consider Core in a any way "most secure" in comparison with paper wallet or hardware wallets.Let's say user have Core on his PC,first he/she need to download 100+ GB of data and then encrypt wallet with strong password.If this user does not take care about online security(no or bad antivirus/firewall/antimalware...) it is very easy target for hackers(RAT,keylogger,malware,ransomware...).Also regular robbing will work in this case also,a gun pointing to your head will force you to decrypt your Core wallet or to give your paper wallet.
I think we can still consider hardware wallets pretty secure if they are ordered directly from the manufacturer what is possible with Ledger&Trezor.For now it is not known that someone has lost coins with hardware wallets(and that this is caused by security flaws in them),but there are countless examples of losing coins with almost all other methods of keeping coins.
Do they claim their hardware to be unhackable!?
More or less they were claiming that it's unhackable, and that's my only issue with them.
https://www.ledger.fr/2015/03/27/how-to-protect-hardware-wallets-against-tampering/
Quote from: link above
There is absolutely no way that an attacker could replace the firmware and make it pass attestation, without knowing the Ledger private key.
This claim was proven false now.
Nevertheless in my opinion I still think a hardware wallet is more secure than any other wallets when used safely.
Just that hardware wallets do have security issues does not make any other type of wallet which have MORE security issues suddenly better.
My ranking of wallets in terms of security would be the following
- Hardware wallets
If you don't take them outside of your home and attacker don't get physical access they are pretty safe -> with physical access as proven now it might not be safe - Paper wallets
If they are kept hidden in a secret place -> but with physical access by an attacker -> no security at all.
If people carry them around I consider them worse than any mobile wallets (they do at least have a pin to secure the wallet). - Airgapped PCs
Pretty safe as long as an attacker don't get pyhsical access. I consider them worse than a hardware wallet because a PC/MAC/whatever even if not connected to the big world has a much bigger attack vector than a hardware wallet if getting pyhsical access. - Any local hot wallets on PC/MAC
With spyware or other malicious software these wallets can be easily compromised. No physical access necessary - Any mobile wallets
The security of such wallets is usually quite bad. Usually very short pin-codes are used to secure the wallet. As it's easy to lose them an attacker can get physical access to it. - Online wallets where you control the private keys
- Online wallets where you don't control the private keys
Did I miss any type of wallet?
Beside of my listed ranking anyone can (and should) improve the security by combining several methods above and use multi signature addresses. In this case it is not possible to steal funds if just one of the methods is compromised.
Would be interested if someone has a different ranking than me.
How about an air-gapped PC?
This. With the proviso that this means a dedicated machine which is never connected to a network, and has hardware capable of non-contact connections (such as wifi and bluetooth) physically removed. I state this explicitly, for I’ve observed that many people mistakenly believe that rebooting their network machines with a live CD/USB makes for an “airgap”.
Part of the advantage of an airgap machine is that the hardware can be purchased anonymously. For ordinary individuals, buying an inexpensive laptop (sufficient for Bitcoin, PGP, etc.) off the shelf for cash is the only practical means I know for precluding any chance of a targeted supply-chain attack. Wherefore this part of the Ledger vulnerability disclosure blog post caught my attention (boldface is in the original):
Quote from: Saleem Rashid
In this disclosure, we will focus primarily on the case of supply chain attacks. That is: whether or not you can trust your hardware wallet when you purchase it from a reseller or third party. But, as I explain briefly at the beginning of this article, the methods described here can be applied to the other two attack vectors.
Well, that was always my biggest problem with hardware wallets! How do I get one?
A company garners my distrust when it not only fails to adequately address this question, but gives its customers advice so irresponsible as to verge on negligence (archive.is link corrected to https):
Quote from: Saleem Rashid
Ledger’s CTO even goes as far as to tell users that it is completely safe to purchase from eBay (archive.is / archive.org).
Do they claim their hardware to be unhackable!?
The first rule of computer security is physical security. If an attacker comes into physical possession of your hardware, then you must thence permanently consider that hardware to be compromised.
My understanding of tamper-resistant hardware wallets was always that they would resist extraction of keymat already stored on the device—backward-looking protection of data at rest. Not that they would guarantee forward safety of the device after it had been in possession of an adversary.
An airgap PC with properly0 encrypted disks will also protect your coins against thieves who steal the device—but with the difficulty that this only moves the key management problem from one place to another: How do you secure your disk encryption keys? Tamper-resistant hardware could be quite helpful here; I’ve had some relevant thoughts, but of course, that would require obtaining uncompromised tamper-resistant hardware.
(Of course, an airgap PC which has been stolen and recovered must be treated as permanently compromised.)
0. Don’t get me started.
So what ways of keeping bitcoins safe do you recommend then? Many people consider hardware wallets as something that is not possible to breach because they were told so.
Yes, and that was irresponsible marketing. Most security-minded people know better than to blindly trust software/hardware just because it hasn't been broken yet. I believe exploits will continue to emerge when it comes to hardware wallets. Accordingly, users should tread with caution.
As for what I recommend -- traditional cold storage for most coins:
I still treat hardware wallets as experimental -- perhaps safer than a typical hot wallet setup, but nowhere near the safety of actual cold storage. Keeping all private keys on one or two devices that plug into online computers just feels way too risky to me. I use tried-and-true cold storage methods (paper wallets, encrypted offline .dat) for 80-90% of my coins. I know that compromising those keys from me would take an extremely targeted attack on me -- the likelihood of that is low. Whereas, I believe that hardware wallets are generally a very big target for hackers, and methods for remote exploits are now emerging.
The biggest takeaway from this report, I think, is don't put all your eggs in one basket.
The biggest takeaway from this report, I think, is don't put all your eggs in one basket.
The only alternative I can think of would be paper wallets but, these are not suitable for spending on a regular basis.
How about an air-gapped PC? Or an encrypted wallet on thumb drive? One of the points here is that nobody should be storing all (or most) of their coins in the same wallet they regularly spend from.
I still think hardware wallets are fine for day-to-day spending. But I would treat them like a hot wallet and be on the lookout for social engineering tactics.
It's worth noting that paper wallets have also been seen to have defects, and those have been corrected, and modern paper wallets are more secure than early ones were.
So what ways of keeping bitcoins safe do you recommend then? Many people consider hardware wallets as something that is not possible to breach because they were told so.
Yes, and that was irresponsible marketing. Most security-minded people know better than to blindly trust software/hardware just because it hasn't been broken yet. I believe exploits will continue to emerge when it comes to hardware wallets. Accordingly, users should tread with caution.
As for what I recommend -- traditional cold storage for most coins:
I still treat hardware wallets as experimental -- perhaps safer than a typical hot wallet setup, but nowhere near the safety of actual cold storage. Keeping all private keys on one or two devices that plug into online computers just feels way too risky to me. I use tried-and-true cold storage methods (paper wallets, encrypted offline .dat) for 80-90% of my coins. I know that compromising those keys from me would take an extremely targeted attack on me -- the likelihood of that is low. Whereas, I believe that hardware wallets are generally a very big target for hackers, and methods for remote exploits are now emerging.
The biggest takeaway from this report, I think, is don't put all your eggs in one basket.
The biggest takeaway from this report, I think, is don't put all your eggs in one basket.
The only alternative I can think of would be paper wallets but, these are not suitable for spending on a regular basis.
How about an air-gapped PC? Or an encrypted wallet on thumb drive? One of the points here is that nobody should be storing all (or most) of their coins in the same wallet they regularly spend from.
I still think hardware wallets are fine for day-to-day spending. But I would treat them like a hot wallet and be on the lookout for social engineering tactics.
I thought that hardware wallets are top secure for saving our bitcoins, Indeed, I thought to buy one in the future, but after reading this PDF. I will keep my bitcoin in some web wallets as I don't have too much, in the same time, I will search for the secure wallet from now on.
Yeah, this is the problem with posts like this, spreading fud and misinformation about hardwallets...... that wasn't any critical bug, as the attacker need physical access..... But New comers may not understand that clearly enough and think web wallets are safer...
I have been warning people about hardware wallets for years. Bitcoin is the most personal store of value. Don't break it by using untrusted third party soft/hardware:
https://krebsonsecurity.com/wp-content/uploads/2018/03/ledgerattack.pdf
Worth mentioning, that the guy who found this exploit is 15 ys young.
I was amazed by this news, I thought that hardware wallets are top secure for saving our bitcoins, Indeed, I thought to buy one in the future, but after reading this PDF. I will keep my bitcoin in some web wallets as I don't have too much, in the same time, I will search for the secure wallet from now on.https://krebsonsecurity.com/wp-content/uploads/2018/03/ledgerattack.pdf
Worth mentioning, that the guy who found this exploit is 15 ys young.
Web wallets are much worse. Just use Bitcoin Core, or other similar software. Web wallets have many more attack vectors than local software.
I have been warning people about hardware wallets for years. Bitcoin is the most personal store of value. Don't break it by using untrusted third party soft/hardware:
https://krebsonsecurity.com/wp-content/uploads/2018/03/ledgerattack.pdf
Worth mentioning, that the guy who found this exploit is 15 ys young.
I was amazed by this news, I thought that hardware wallets are top secure for saving our bitcoins, Indeed, I thought to buy one in the future, but after reading this PDF. I will keep my bitcoin in some web wallets as I don't have too much, in the same time, I will search for the secure wallet from now on.https://krebsonsecurity.com/wp-content/uploads/2018/03/ledgerattack.pdf
Worth mentioning, that the guy who found this exploit is 15 ys young.
I think that hardware wallets happen to be very much so in the spotlight right now. Let's not forget that there was also an Electrum vulnerability found and patched recently. I believe that part of this has to do with how long hardware wallets have existed compared to their software counterparts, and how much time people have spent researching them.
Personally, I trust hardware wallets more than software wallets still. I'm not sure they're inherently insecure, but I don't believe they're perfect either. I think as far as security versus convenience, they rank pretty high up there on my list.
Personally, I trust hardware wallets more than software wallets still. I'm not sure they're inherently insecure, but I don't believe they're perfect either. I think as far as security versus convenience, they rank pretty high up there on my list.
Just because there are vulnerabilities found does not mean that they are inherently insecure. Do you say the same things about software wallets too (many of which have had vulnerabilities found and patched, just like with these hardware wallets)? Do you say the same thing about the general purpose computer you use which you don't even know how it works? Every piece of software and many pieces of hardware will have some vulnerability found in them; given enough time, it's almost inevitable.
...
Worth mentioning, that the guy who found this exploit is 15 ys young.
That's slightly misleading. This 15 year old has dedicated a lot of time into working on hardware wallets, particularly in their firmware. He's been involved in numerous other vulnerability discoveries in the past with Trezors (and possibly Ledgers). The kid is very smart, probably smarter than you when it comes to hardware wallets. He's not just some random 15 year old who found this; he actually dedicated a lot of time into learning about how hardware wallets work and has been working with them for years....
Yes, I think hardware wallets are indeed inherently insecure, just like any SPV wallet. I also call every cryptocurrency exchange inherently insecure even though it might not have been hacked until now.
I don't know how you come to the conclusion, that I don't know how a computer works, but anyway ... just the knowledge about how it works, might still not be enough to trust it 100%, but I guess we have not much of choice until we see open source chip production. One good example is the latest Intel issue and I am sure there will be more to follow. Btw I have addressed this one already a few postings before in this topic:
....
Of course, the fact that we have to use closed source computers to run Bitcoin Core, makes it impossible to be 100% safe esp. against state actors.
Of course, the fact that we have to use closed source computers to run Bitcoin Core, makes it impossible to be 100% safe esp. against state actors.
...
You don't have to use a closed source OS. You have decided for yourself to use closed source software.
Everyone is free to use the software he wants. There are a lot of open source linux distributions available on the internet.
Of course, the fact that we have to use closed source computers to run Bitcoin Core, makes it impossible to be 100% safe esp. against state actors.
You don't have to use a closed source OS. You have decided for yourself to use closed source software.
Everyone is free to use the software he wants. There are a lot of open source linux distributions available on the internet.
I didn't say 'closed source OS' but 'closed source computers'. No problem. Misreading can happen.
Just because there are vulnerabilities found does not mean that they are inherently insecure. Do you say the same things about software wallets too (many of which have had vulnerabilities found and patched, just like with these hardware wallets)? Do you say the same thing about the general purpose computer you use which you don't even know how it works? Every piece of software and many pieces of hardware will have some vulnerability found in them; given enough time, it's almost inevitable.
Scroll down to "Disclosure timeline"
Worth mentioning, that the guy who found this exploit is 15 ys young.
That's slightly misleading. This 15 year old has dedicated a lot of time into working on hardware wallets, particularly in their firmware. He's been involved in numerous other vulnerability discoveries in the past with Trezors (and possibly Ledgers). The kid is very smart, probably smarter than you when it comes to hardware wallets. He's not just some random 15 year old who found this; he actually dedicated a lot of time into learning about how hardware wallets work and has been working with them for years.Not 100% true, from what he said it was vulnerable to the "Evil Maid attack"
https://saleemrashid.com/2018/03/20/breaking-ledger-security-model/
I don't think you understand what an evil maid attack is. It is, by definition, a physical access attack. You need to have physical access to the device in order to perform any of the known vulnerabilities (which have since been patched). An evil maid attack means literally that someone (like a maid) enters your room physically and does something malicious to a device (hence an evil maid).https://saleemrashid.com/2018/03/20/breaking-ledger-security-model/
Which took them close to 4 months to put out and still is not properly alerting & forcing users to update.
Vulnerabilities take time to fix and release. They can't just publish that there is a vulnerability or details about the vulnerability before a fix is available. It probably took them 4 months to figure out a solution. Also, Ledger can't force users to update, and there has been plenty of alerting (which, by the way, also cannot be forced).Assuming you can trust everyone who handled the package from when it left their shipping dock till when it wound up in your mailbox.
There's a hardware and software attestation process that you can go through to ensure that your Ledger has not been tampered with.What is the source for the 4 months? As far as i know this has been fixed pretty fast..
https://saleemrashid.com/2018/03/20/breaking-ledger-security-model/Scroll down to "Disclosure timeline"
This is a problem, and was already fixed by a firmware update.
Which took them close to 4 months to put out and still is not properly alerting & forcing users to update.What is the source for the 4 months? As far as i know this has been fixed pretty fast..
Assuming you can trust everyone who handled the package from when it left their shipping dock till when it wound up in your mailbox.
You don't have to trust anyone. You can verify everything yourself (hardware + firmware).
The ledger team has published a guide: https://support.ledgerwallet.com/hc/en-us/articles/115005321449-How-to-verify-the-security-integrity-of-my-Nano-S-
Of course, the fact that we have to use closed source computers to run Bitcoin Core, makes it impossible to be 100% safe esp. against state actors.
You don't have to use a closed source OS. You have decided for yourself to use closed source software.
Everyone is free to use the software he wants. There are a lot of open source linux distributions available on the internet.
Well, this evil maid attack is even less risky. How would a hacker access my hardwallet, inside my house?
If he can get inside your house , well, he can force you to give your btc to him even on an airgapped PC using Bitcoin core, he doesn't even need to be a hacker, he just needs a weapon.
When you buy a ledger nano they come securely closed, and if the seal was violated you should discard it, as ledger recommendation. You don't need to trust anyone who handles the package..
But this discussion is pretty worthless.. it's a selected Paranoia. Hardwallets are safe enough.
If the user is the problem (like using infected pendrives, using violated hardwallets), any method is unsafe
If he can get inside your house , well, he can force you to give your btc to him even on an airgapped PC using Bitcoin core, he doesn't even need to be a hacker, he just needs a weapon.
When you buy a ledger nano they come securely closed, and if the seal was violated you should discard it, as ledger recommendation. You don't need to trust anyone who handles the package..
But this discussion is pretty worthless.. it's a selected Paranoia. Hardwallets are safe enough.
If the user is the problem (like using infected pendrives, using violated hardwallets), any method is unsafe
That's why it's called the evil maid, we can call it dishonest butler, sneaky plumber, corrupt cable tech.
Whatever. WE are human, we make mistakes, you left it siting next to your PC for whatever reason instead of putting it away. Under 3 minutes and a netbook. That's all they need.
When you buy a ledger nano they come securely closed, and if the seal was violated you should discard it, as ledger recommendation. You don't need to trust anyone who handles the package..
They actually did not
And I think that set me off more then anything. They badmouthed other places for saying that their taper tape was worthless, while putting out a product that a 15 year old (yes a very smart one) cracked by himself.
Beyond this, I am dropping out of this thread. I doubt either one of us is going to change the others mind.
-Dave
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