Quote from: DannyHamilton on December 27, 2022, 10:24:47 PM

Quote from: zander1983 on December 27, 2022, 09:58:28 PM

If you think of user id + password as the same as a seed phrase, cant something similar be used here (eg 3d secure by sending an OTP to the user's phone)?

You can't change the seed phrase for a HD wallet. That's not how cryptocurrency (or at least Bitcoin) works. If you change the seed phrase, you get a completely different wallet with completely different addresses. That will not give you access to the funds that are still stuck at the addresses from the old seed phrase.

A userID and password is something that gives access to a website. If you operate the website, you can generate a one-time password (I assume that's what you mean when you say OTP?) and send it to a user, then when they connect to your website, you can force them to create a new password. You can do this because you control the website, and you get to choose who gets to access the website and who doesn't. You get to choose the methods that are used to access that website.

There is no "Bitcoin Company" that has control of access to the Bitcoins. Therefore, there is nobody available to issue a OTP that will allow the user access to their Bitcoins. If the user has permanently lost their seed phrase (or any of the associated private keys), and there is nobody else storing any of that for them then those Bitcoins are locked into those addresses forever.

So, I suppose you could store a copy of the user's seed phrase for them. Then if they forget their seed phrase, you could give it back to them, but then you are taking on the risk of storing that phrase. If you are hacked, and the hacker gets the seed phrase, then they have access to ALL of the private keys and therefore all of the addresses associated with that HD wallet.

That makes sense. So we're back to people cant be trusted to store their seed phrase - and storing them on a server is too insecure. Seems to be one of the main barriers to adoption.