How Peter Kroll’s Paper Wallet Protects Cryptocurrency
Since its invention, a recurring question for cryptocurrency holders has been how to best secure their digital assets. This question of security carries the greatest weight when one understands the stakes of holding unprotected cryptocurrency — vulnerability to hackers.
Since 2011, software developers have kept this problem at the back of their minds. One such innovator, Peter Kroll, recently joined Rob Mitchell on Episode #56 of The Bitcoin Game to discuss the background of his ventures and the technical details of his most lauded project in cryptocurrency security.
BitAddress and the Paper Wallet
Kroll’s primary contribution to the field of crypto security has been his invention of the first paper wallet, at Bitaddress.org. Having launched the original website anonymously in 2011, he was able to hone a system of security that addresses several of the most prominent flaws of cryptocurrency security.
Kroll’s website solves several core problems in a remarkably elegant way. To begin with, the HTML code for the website itself does not need an internet connection to execute after its page has been loaded. This means someone can perform the entire process of generating a new wallet without being vulnerable to a cyberattack across the internet.
The program then adds a human-component circumvention, asking users to move their computer mice in erratic patterns, to eliminate the problem that coded systems are unable to generate truly random numbers. Using intervals decided by pseudo-random numbers and other factors, the program captures the exact pixel that the mouse cursor was on at any given moment and uses the number of this pixel to generate the hash for a bitcoin wallet.
Kroll explained that this strategy is useful because certain pieces of hardware contain exploitable flaws in their pseudo-random number generators, whereas flawed devices running the BitAddress software create hashes that are not vulnerable in the same way.
For a final piece of security, a wallet is given a QR code that can be printed out onto a piece of paper, thus keeping it offline and insulated from a cyberattack. In doing this, Kroll’s security program manufactures novel wallet addresses that are protected from several of the most common vectors of theft.
The Vision Behind the Technology
]In addition to explaining the technical details of his groundbreaking platform, Kroll also gave context to what inspired him in the cryptocurrency environment. Furthermore, he went on to outline what he believes to be some of the most salient issues surrounding the space today.
Over the course of the interview, Kroll gave a number of personal details about why he ended up working in the cryptocurrency space. He started by recollecting his earliest interactions with the world of technology development.
“When my mom brought home our first computer,” Kroll recalled, “you couldn’t really do much on it. Programming seemed the natural thing to do.”
For a 14-year-old during the dot-com boom, the costs of many specialty pieces of software were completely prohibitive. Learning to program at a young age motivated Kroll to seek opportunities when the value of software would spike next.
His experience building micropayment venues in this era, naturally, attracted him to Bitcoin. It also prepared him to quickly see the inherent flaws in its security. By creating his website so early in the space, Kroll’s platform became a significant influence in the world of cryptocurrency. It also allowed him to iron out all the kinks in the program before vast audiences adopted it.
Toward the end of the interview, Kroll began speaking about some of his future ventures, trying to similarly hammer out all of the potential quandaries in developing a diversified hedge fund for cryptoassets. In this segment, he laid out some of the core philosophical differences that led to the current status of altcoins as well as advice for how to proceed with alternative cryptocurrencies in the future.
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