Ledger Introduces Cloud-Based Private Key Recovery Solution Despite Criticism
Hardware wallet manufacturer Ledger is moving forward with the launch of its cloud-based private key recovery solution, despite facing significant backlash from the cryptocurrency community. The new service, called Ledger Recover, is set to debut on October 24th and will be available for users of the Ledger hardware wallet.
Providing Additional Resilience with Seed Phrase Recovery
Ledger Recover, developed in partnership with Coincover, offers a paid subscription service that allows users to back up their Secret Recovery Phrase (SRP). The SRP consists of a unique list of 24 words that serves as a backup for private keys and grants access to crypto assets.
An Optional Service for Added Security
According to Charles Guillemet, Ledger’s Chief Technology Officer, Ledger Recover was designed for users who want an extra layer of resilience in case their SRP is lost or destroyed. Guillemet emphasized that the service is optional and users can continue using their Ledger devices without any changes if they prefer not to subscribe to Ledger Recover.
Compatibility and Availability
Initially, Ledger Recover will be compatible with the Ledger Nano X device. Integration with Ledger Stax and Ledger Nano S Plus is planned for the future. However, it will not support the Ledger Nano S device.
The service will be available to passport or identity card holders in the United States, Canada, the United Kingdom, and the European Union. Ledger plans to expand coverage to more countries and add support for additional identification documents.
Differentiating Identity Verification from KYC
Ledger clarified that its identity verification process for Ledger Recover is distinct from Know Your Customer (KYC) checks conducted by centralized cryptocurrency exchanges. Ledger’s recovery system only requires a valid government-issued document, collecting significantly less information compared to KYC processes.
Pricing and Subscription Details
According to social media posts, the Ledger Recovery service will be available for $9.99 per month or approximately $120 per year. Failure to pay the subscription fee will result in suspension, but users can reactivate their subscription within nine months by paying an administration fee of 50 EUR along with any outstanding balance.
The Controversy and Competitor Comparison
Ledger faced criticism from the crypto community when it initially paused the recovery service in May 2023. However, Ledger CEO Pascal Gauthier announced that the product would launch after the release of its open-source code. In contrast, Ledger’s main competitor, Trezor, has chosen not to introduce a cloud-based recovery solution and instead offers a physical backup tool called Trezor Keep Metal.
Hot Take: Ledger Pushes Forward with Enhanced Key Recovery Service
Despite facing backlash, Ledger is launching its cloud-based private key recovery solution, Ledger Recover. This optional service aims to provide users with an extra layer of resilience by allowing them to back up their Secret Recovery Phrase. While some critics remain skeptical, Ledger is moving forward with its offering, emphasizing that it is not mandatory for users and will not affect their current usage of Ledger devices. As the competition between hardware wallet manufacturers intensifies, Ledger’s decision to introduce this recovery solution sets it apart from Trezor’s physical backup approach.
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