Centralised vulnerability of the ‘Ledger Wallet ’ and solutions (2018-01-25)

I believe many were scared by the Ledger Wallet outage yesterday (24th, Jan., 2018). Most of the crypto currencies APIs were out of order for several hours and BCH API is still not full recovered: http://status.ledger.fr

I am amazed to realise so late myself that the ‘Ledger Wallet’ products are centralised solutions for decentralised cryptocurrencies:

If their APIs went off (due to hacking or natural disaster), not only one’s trade is off one could also loose access to its fortune indefinitely!

The fact that Ledger’s official tweet said nothing about the outage shall worry EVERYONE.

So the solutions:

1. Local wallets in a PC:

– If the wallet is encrypted AND private key backed up AND the PC is kept clean, you shall be fine.

– A DEDICATED trading PC is a much safer choice.

MUSTDO: run a recovery drill with the wallet backup files in another PC.

2. Local wallets with storage on a USB key:

The setup is similar as 1, but you choose to put the wallet files in an external USB key. This way, you can unplug the USB key once your transfer is done. You now have a ‘Ledger Wallet’ without the API outage risk.

MUSTDO: Wallet backup and recover drill as in 1.

3. Virtualbox OS on a USB key:

It’s a little advanced but doable:

– Get a metal USB key

– Download the virtualbox and the ‘extension pack’ for your OS and install.

– Choose a Linux distribution (Debian or Ubuntu is the easiest) or stick to Windows (a Windows 10 license is less than 10 USD in amazon). Download the Linux/Windows ISO files.

–Install the Virtualbox ‘Guest Additions’ CD.

– Plug in the USB key ( >256 GB if you play to install full node wallets) and choose the external USB storage as the destination during the OS (use the downloaded Linux/Windows ISO files) installation process. You can even encrypt the installation to make the USB key theftproof.

– You can do everything (trading, wallet installation etc.) in the virtualbox OS.

  • Virtualbox allows backup of the whole OS into one file and restore in another PC with the virtualbox installation. That’s a backup strategy on its own.

MUSTDO: Wallet backup and recover drill as 1.

The solutions above concentrate on maximising the availability with the Ledger Wallet API outage in mind.

Bitcoin whales OUGHT to invest in a better decentralised cold wallet than Ledger.

4 Likes

Correct me if I’m wrong, but as I understood, although the ledger wallet itself is of course run and maintained by the company (Ledger), all the generated keys are derived from your 24-word phrase (through BIP39/32/44 algorithms).
As you control the 24-word phrase (seed), you should be able to restore any wallet address for any coin stored on the Nano S using another software and the appropriate seed…
As far as I know most (all?) coins follow these standards and should be recoverable on any BIP 39 compliant wallet using your recovery seed.

5 Likes

Very well. Do you know a software wallet that support many coins as the Ledger?

I will test the recovery on it.

Thanks

1 Like

I found bither : https://bither.net. it is the only desktop wallet listed in the Ledger site.

1 Like

I will link the ledger wallet support article on that subject, that isn’t exactly up to date (Feb 2017), but that’s a start:


Also, (although I haven’t tried) it seems you can manually generate all keys on this page:
https://www.ledgerwallet.com/support/bip39-standalone.html

2 Likes

Bither is one, but also MyTrezor, MyEtherWallet, Mycelium and Coinomi

1 Like

Please tell us how your tests went, and if you ran into any trouble during the recovery.
Thanks !

1 Like

You can use ledger with electrum wallet.
You dont need ledger apis.

2 Likes

Thanks. I will try it out.

Have you tried to recover a Ledger device with electrum?

1 Like

Am I missing something but if you’re worried then just get a paper wallet?

2 Likes

I am trying to cover the situation where all coins are locked up in a hardware wallet such as Ledger. All you have is the recovery phrase on paper.

Do you know a way to convert the Ledger wallet directly to the paper wallet?

1 Like

You don’t need electrum wallet to recover it.
All you need is power supply(your phone charger) and your seed key.

1 Like

Although I believe this would work, I am concerned to use a web page to derive the private keys. It’s a huge leap forward from keeping all keys offline in the hardware wallet to pasting the most important secret into a webpage, albeit ‘open source’.

In case of many coin types, one would have to install individual software wallet for each coin. Electrum or Bither is just for Bitcoin.

1 Like

This may or may not be the correct thread to ask this question. Please if anyone has any advice, let me know. Before connecting/linking my Ledger Nano to Ether Delta, is it recommended that I disconnect my WiFi, then connect to Ether Delta and link up my Ledger. Then turn Wifi back on? Or am I being overly cautious, or is this procedure not nesessary with the ledger? I always get the creeps accessing my ledger while the internet is connected. Thank you in advance.

1 Like

Are you talking about the ledger nano S, the USB key?

1 Like

yes… htsehalkfhlsdhfhsdfhhf

1 Like

Then you got to believe the main security claim of the nano S: the private keys are never exposed to the app.

Nano S is ‘safer’ comparing to other software or cloud wallets, which are on the Internet all the time. Ledger company charges a premium for it.

1 Like

Ok, …Im still researching other threads in the Pub on security measures for my system…Im no where near what I should be doing yet. Ill eventually get there but my goodness, the techy shit involved is like learning a new language. Im techy, but implementing security measures is a different level than Im accustomed too. Thank you for helping me.

1 Like

Im gunna have to quit my job to figure this all out in a timely manner…LOL

1 Like

Ive got a 12 month plan to quit my job. I just took on two investors to broker for. I found a formula that’s producing 300% return average ever 6 weeks. Im planning to duplicate the process and go full time into Crypto.

1 Like

💰 YEN · YouTube ·️ YEN.CAMP 🧠