Early Tuesday, May 16, Ledger announced an upcoming and optional update for its users, titled Ledger Recover. At its core, the system is designed to offer an alternative to the self-storage of a wallet's 24-word recovery phrase and provide a way to gain access to that wallet should the phrase be lost or forgotten.
Ledger Recover is achieved by breaking the seed phrase into three different encrypted shards, which are then shared and stored with three different backup providers. To gain access to each individual shard, users are required to prove their identity.
Despite the potential to be useful for newcomers or the less tech-savvy, a large number of users on Crypto Twitter (CT) have come forward to share their concerns surrounding the new update, while others have defended it as a net good for the space.
Exciting update, Ledger has a new product, Ledger Recover, that’s launching soon: https://t.co/nT1VHnnSYz
?Here’s what Ledger Recover is and what it isn’t, explained by @P3b7_ & in the thread below. pic.twitter.com/RW1w07H6pK
— Ledger (@Ledger) May 16, 2023
In a thread viewed nearly 600,000 times, user Web3 Phil highlighted a few of his concerns, many of which are apparently shared by the broader community -- with the potential shift into counter-party risk and sacrifice of true self-custody being at the top of the list.
Let's not forget the core strength of Bitcoin and crypto: true confiscation resistance.No one can steal your Bitcoins if properly stored, no matter what.
And if we read between the lines of this update, the threat to our assets is indeed tangible.
(8/10)
— Phil (@web3_Phil) May 16, 2023
He further explained that the update opens the doors for a potential full know your customer (KYC) recovery in the future, which could put users' assets at risk of forced withdrawals from third parties like financial institutions or regulators -- a line Phil says "we cannot cross."
Others, like user Top Smoke, shared a thread simplifying the upcoming update, viewed nearly 550,000 times across Twitter. In the thread, he shared that the "issue has been blown out of proportion," and that as stated by Ledger, the opt-in service is designed with future customers in mind. Additionally, Ledger expressed that experienced users should continue to self-custody their assets.
Ledger recommends individuals with good OpSec to avoid using Ledger Recover and just self-custody their assets, as they always have.
Ledger Recover is for newcomers who do not want the responsibility of storing their own seed phrase.
(8/10)
— Top Smoke (@realtopsmoke) May 16, 2023
In a recent Twitter Space responding to the mixed feedback from the community, Ledger CEO Pascal Gauthier shared "you’re saying this is not what customers want. Actually, this is what future customers want," explaining that "this is the way that the next hundreds of millions of people will actually onboard to crypto."
Speaking to technical concerns, Ledger expressed in a tweet that "Your seed never leaves the secure element on your Nano device - If you choose to use Ledger Recover, it is split into three encrypted shards," adding that "only those shards leave the secure element, in which case it is transmitted via a secure channel to our three Ledger Recover providers. This can only happen if you physically consent on your device after signing up for Ledger Recover."
As put plainly by one user on CT, "basically… Ledger is the same as it always has been, except now there’s an optional, extra level of security if my grandma were to buy one -- sounds good to me."
In other news, Tuned Global and Revelator integrate NFTs into Web2 streaming services.
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