Quote from: klosure on October 09, 2016, 05:27:30 AM

A few words on security:

Currently the Lykke app will let you create a wallet without explaining that Lykke doesn't actually control the wallet but stores an encrypted blob. People will naturally assume that there is a password recovery feature should they forget their password (which they always do). This is going to create a lot of trouble as people end up being locked out of their wallet upon losing/changing phone or inadvertently logging out of their wallet without making sure they know the password. It is critical that the wallet app explain unambiguously that the wallet itself will become unusable should people forget their password and that Lykke won't be able to recover it. The wallet app should also require people to backup their private key on paper (and put it in a safe place without showing it to anyone) so that they always have a last resort mean to recover their wallet should they lose their smartphone and forget their password and/or pin. Please Lykke make sure your app is fool proof. It will look bad to regulatory authorities if shareholders come complaining that they are not being able to exercise their rights as shareholders due to technical reasons like losing access to one's crypto wallet.

Another issue I see is that although the app allows you to backup your private key as a brain wallet, it doesn't currently offer a way to restore the wallet using said private key. At least I haven't seen anything like that after removing the app and trying to recover from the private key.

Last but not least Lykke needs a desktop wallet and this wallet should be open source and compile under Linux, Mac and Windows. Smartphone security is shaky at best, and nobody in their right mind is going to trust their smartphone with 5-digit figures, like what some people are probably investing in this ICO. I for one feel really uneasy about that. I have never trusted my smartphone with more funds than I usually have in cash in my physical wallet (so a few hundred dollars at most), and refuse to use Paypal or credit card from it for fear of this information being compromised. It feels really awkward to suddenly have to trust this poorly secured device with a large sum and hope it's going to be alright.

One more thing: I understand that LKK and other Lykke exchange based assets are really OpenAssets colored coins. Does that mean that they can be sent to any Bitcoin address and controlled using another OpenAssets client unrelated to Lykke? If that's the case it could be a solution to ship a desktop wallet quicker as developments could be based on some existing OpenAssets implementation.

Thanks again for this considerate post. During heat of the ICO didn't have so much time to respond to everything in detail. Actually, it is a dedicated strategy to leverage security properties of mobile, and the iPhone in particular with fingerprint. Could you expand why you see phone security as so low? For an attacker it should be much more difficult to break iPhone security, than typical less secured desktop. Perhaps also a question about decentralisation, because Apple has some control over the app store etc.

LykkeX

Posts

Merits