README.md
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# seed-otp
`seed-otp` is a Python-based one-time pad CLI tool for storing your Bitcoin seed
mnemonic words securely using multi-factor auth. The simple, well-written code
can be easily audited, and the method itself can be applied using pen-and-paper,
rather than using a computer.
<p align="center">
<img alt="Demo session" src="https://brndnmtthws.github.io/seed-otp/demo.svg">
</p>
📹[I made a presentation about this tool (YouTube)](https://www.youtube.com/watch?v=N6uV5jWfXXQ)
## Background
### The Problem
You have an HD wallet such as a Trezor or Ledger for storing your Bitcoin,
and you would like to store your seed mnemonic phrase. You may also
want to store multiple copies of your seed in different places.
Unfortunately, if any one of those copies of your seed becomes compromised,
anyone with access to the seed can now take all your coins, and buy
themselves
a lambo.
Normally you would not need access to your seed mnemonic. However, should
something happen to your wallet (perhaps you lose it, or it breaks), you may
need to restore the wallet using the seed phrase.
### This Solution
Combine a [one-time pad](https://en.wikipedia.org/wiki/One-time_pad) with
[multi-factor
authentication](https://en.wikipedia.org/wiki/Multi-factor_authentication).
By using mult-factor auth (something you know plus something you have)
and one-time pad encryption, you have a simple yet extremely hard to crack
solution. With your OTP key and seed mnemonic stored separately, it becomes
onerous to obtain both. Even if someone _does_ obtain either your mnemonic or
OTP key, you would have time to move your coins to a new wallet with a brand
new seed before anything happens to your coins. A one-time pad is considered
perfect secrecy: it's nearly impossible to brute force attack so long as the
key remains secret.
Your auth factors are:
- **Something you know**: A one-time pad key which you have stored securely in
a password manager, which is locked with a password only you know. The
password DB is backed up securely.
- **Something you have**: An encrypted mnemonic seed phrase stored on archival
paper or another long term physical cold storage device. The phrase itself
looks like a normal mnenomic phrase, which provides plausible deniability,
and does not indicate to anyone who might find the phrase _how_ it's
actually used.
### Caveats, Limitations, Considerations, Gotchas
- To use this tool, you need to enter the seed words into a computer. If your
computer is compromised, someone could still use a keylogger or other tool to
capture the seed mnemonic. Only use this tool if you trust the computer you
are using.
- The BIP-0039 mnemonic includes a checksum. After encrypting the words, the
checksum will break. Encrypted seed words are unlikely to be valid. This
may be a problem since it breaks the plausible deniability of storing
the encrypted seed words (as the encrypted mnemonic is not actually a
valid phrase). The disadvantages of handling the checksum gracefully is
that it's backward incompatible, and it would be much more difficult to
apply the OTP by hand using pen and paper.
- The OTP encoding (see [the "OTP key" section](#otp-key) below) does not
include any version/format metadata. The reason for doing this is to
reduce the amount of information in the key which could be used to
derive some other information (i.e., reduces the degree to which it is
[information-theoretically secure](https://en.wikipedia.org/wiki/Information-theoretic_security)).
The trade off, of course, is that it's difficult to modify the key format
and maintain backward compatibility.
### Other Solutions
There are a variety of other solutions to this problem, some of which may be
more appropriate for your needs. Let's go over some of the alternatives and
discuss why they might not be appropriate:
1. Custody with a third party, such as Coinbase.
- The main problem with any third party custody service is that you must
place complete trust in that third party.
- Custody providers are not immune to crime, theft, rogue employees,
mistakes, going out of business, or government intervention. _Rekt_.
2. The Horcrux design (using a multi-signature scheme).
- This pattern is based on the idea of storing small pieces of your seed
phrase in several different places, much like Voldemort did with his soul
in Harry Potter.
- While it's not impossible to do this on your own, it's logistically
tricky and prone to error.
- There is at least one company which provides this option as a service,
but at the time of writing they're asking for several thousand dollars
per year in subscription fees, an amount that is both absurd and out of
reach for normal people. _Rekt_ because you have no money left.
3. Storing your seed phrase in a super secret place and hoping nobody finds
it.
- This is equivalent to burying a chest full of treasure in your backyard
and hoping nobody looks there. _Rekt_ when your neighbour buys a metal
detector.
4. Store the seed phares itself using a password manager.
- The main downside is that you do not have multi-factor auth: if someone
gains access to your password manager, you will be _rekt_.
## Quickstart
### Checklist
Before using this tool, you should have a few things:
- [x] Get a decent hardware wallet from a reputable vendor. 2 popular options
are [Trezor](https://trezor.io/) and [Ledger](https://www.ledger.com/).
- [x] Get a password manager, and learn to use it (if you haven't already). A
few good options are [KeepPassX](https://www.keepassx.org/),
[1Password](https://1password.com/), or [BitWarden](https://bitwarden.com/).
Make sure your passwords are backed up, and test the restore process.
- [x] Figure out a good way to store your mnemonic seed phrase, such as using
archival paper or a metal seed storage product (check out [@lopp's stress
test
here](https://medium.com/@lopp/metal-bitcoin-seed-storage-stress-test-21f47cf8e6f5)).
- [x] Have a safe place to store the seed mnemonic, such as in an actual safe,
or a safe deposit box.
- [x] Make sure you have a secure computer to run the software. It should be
running an up-to-date and secure OS. Avoid using any computers which might be
controlled by third parties (such as a work computer, or your friend's
computer). If you want to be extra safe, consider using a [privacy OS such as
Tails](https://tails.boum.org/)
After using the tool, make sure you **test the seed restore process**!
### Install from PyPI
```ShellSession
$ pip install seed-otp
```
### Generate an OTP key
```ShellSession
$ seed-otp generate 12
{
"otp-key": "AAwCnwGIAe0EWABWAI4AkAMjAFQBLgZjB1T1PJtz",
"success": true
}
```
Store the key above in your password management tool.
### Encode your seed mnemonic using the OTP
```ShellSession
$ seed-otp encrypt AAwCnwGIAe0EWABWAI4AkAMjAFQBLgZjB1T1PJtz abandon ability able about above absent absorb abstract absurd abuse access accident
{
"encrypted-words": [
"fault",
"couple",
"digital",
"merge",
"area",
"bar",
"barrel",
"grab",
"argue",
"cheap",
"soap",
"typical"
],
"success": true
}
```
Store the phrase above in your safe place.
### Decode your seed mnemonic using the OTP
```ShellSession
$ seed-otp decrypt AAwCnwGIAe0EWABWAI4AkAMjAFQBLgZjB1T1PJtz fault couple digital merge area bar barrel grab argue cheap soap typical
{
"decrypted-words": [
"abandon",
"ability",
"able",
"about",
"above",
"absent",
"absorb",
"abstract",
"absurd",
"abuse",
"access",
"accident"
],
"success": true
}
```
## Synopsis
Usage: seed-otp [OPTIONS] COMMAND [ARGS]...
Options:
-h, --help Show this message and exit.
Commands:
check-key Check OTP key for encoding or checksum errors.
decrypt Decrypt seed words using an OTP key.
encrypt Encrypt seed words using an OTP key.
generate Generate a secure OTP key for up to NUM_WORDS number of words.
Command output is usually formatted as JSON, so you can pipe the output to
other tools (such as [`jq`](https://github.com/stedolan/jq)) and get wild.
## Implementation Details
### OTP Key
The OTP key is a URL-safe base64 encoded key (without padding) composed of N
subkeys, where N is the number of keys specified at creation time. The values
are stored as big-endian short unsigned integers (2-bytes each). The last 4
bytes of the OTP key is the first 4 bytes of the SHA256 digest of the
preceeding bytes.
0 1
0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5
+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+
| Number of Keys |
+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+
\ /
/ Keylist (variable length) \
\ /
+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+
| |
+ Checksum +
| |
+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+
BIP-0039 uses 11 bits per word, but in this scheme we're using 16 bits per
word. This is mainly for simplicity, with the trade-off of using more bytes.
It also allows the possibilty of using larger wordlists (of up to 65536
words).
### Encrypting/decrypting words
Below is some pseudocode for encrypting/decrypting. Assume that the words and
keys are mapped to integers representing an index position in the wordlist.
To encrypt a word, the algorithm is as follows:
ciphertext = (word + key) mod 2048
To decrypt a word, do the following:
word = (ciphertext - key) mod 2048
You could perform the encryption/decryption using pen and paper if you feel
the need to do so. This would prevent the necessity of typing your seed words
into a computer. Naturally, you could also generate your own keys and store
those offline as well. For practical purposes, however, this is probably
unnecessary.