In practice, this typically means you need to go through the process of creating a new wallet, setting up a password and writing down a lengthy list of words known as a seed phrase. You also have to store the seed phrase in a secure manner, because it’s the only backup for your money in case something goes wrong with the wallet.
Israel-based startup ZenGo has just launched a cryptocurrency wallet that uses some clever cryptography to make this process much simpler.
A very short primer: A cryptocurrency wallet is, essentially, a pair of public and private cryptographic keys. The public key is your cryptocurrency address (technically, it’s a part of the address but let’s keep it simple), the same one you use for receiving funds. The private key is a long string of symbols that lets you spend the funds residing at that address.
The private key is simple but impractical to use on an everyday basis. If someone takes a photo of it, or hacks your PC or phone and grabs it, they can spend your cryptocoins at will. This is why we have wallet software, which rarely (if ever) actually shows or requires you to type in your private key. Instead, you choose some sort of password to protect your funds, but your private key remains in your possession, typically as the seed phrase mentioned above. So if your phone or PC gets stolen, you can reinstall the wallet software, punch in the seed phrase, and access your money.
The seed phrase, while a little bit easier to write down than the private key, is also long and hard to remember. So people typically write it down on a piece of paper that’s once again, easy to get lost or stolen. If you have the misfortune to lose your seed phrase and (for example) the phone with your wallet software, your money is gone forever.
Keeping it simple — with your face
With ZenGo, the process of creating your crypto wallet consists of these simple steps: Install the app, enter your email, click on the link you’ve received via e-mail, and have the app scan your face. Once you’ve done that, you can start receiving and sending Bitcoin and Ethereum which are currently the only two cryptoassets supported by ZenGo. And if you lose your phone, you can install the app on a new phone, have it scan your face, and your funds will immediately be restored.
Now, you may have seen certain services or wallets that aren’t complicated to use — one of the world’s most popular cryptocurrency exchanges, Coinbase, comes to mind. But that’s different: Coinbase does not let you control your own private keys. This approach creates a different kind of danger: If Coinbase gets hacked or compromised in some way, there’s no way for you to retrieve your funds. In other words, you are not your own bank — Coinbase is your bank.
ZenGo solves both the issues outlined above. Instead of the seed phrase, it uses the face scan. And instead of storing all the cryptographic info derived from that face scan on its servers, it divides the pieces of the puzzle needed to restore your wallet between its servers and your iCloud account. This is done by using a technology called threshold signatures, in which several parties are needed to create the private key. In this case, ZenGo’s servers and your mobile phone must both cooperate to generate the key.
Thanks to all of this tech in the background, ZenGo doesn’t require you to use any kind of password or key, ever. Your face is your password, even when you need to send funds, and even when you need to restore them.
I’ve tested ZenGo out with Ethereum and, outside of a few early error messages when signing up, it worked as advertised. Receiving and sending funds to my address worked as if using any other wallet. Upon sending a small amount of ether to my ZenGo wallet, the app immediately sent me a notification that funds are coming in. And to send some ether out, all I had to do was choose a receiving address and tap a button; after a successful face scan, the funds were on their way.
Having your funds secured by a face scan can be scary, especially knowing that technologies like Apple’s Face ID have been defeated before. But ZenGo says it uses a very secure face scanning tech called ZoOm. ZenGo CEO Ouriel Ohayon told me via email me that ZoOm’s been “battle tested over millions of users including banks” and it “cannot” be gamed.
Cryptocurrencies can be frightening and complex for new users, and wallet software, being an entryway into owning crypto, should be as simple as possible without sacrificing security. ZenGo is by far the simplest cryptocurrency wallet software I’ve used, both when it comes to everyday use and restoring your wallet.
There’s room for improvement, of course. The software itself is very sparse in terms of features (though that may be a good thing, too), and only two major cryptocoins are supported. Ohayon told me more assets will be supported very soon, and an Android version of the app should be launched in the “next few weeks.” Also, more features are coming, some of which are “not possible” with traditional wallet apps.
Even though ZenGo’s cryptography is sound and open to public evaluation (it’s entirely open source), it’d be hard to recommend storing larger amounts of money on it until it’s a bit more tried and tested on the battlefield. Overall, though, ZenGo’s focus on keeping things simple while using innovative cryptographic solutions to secure your funds makes it a welcome addition to the cryptocurrency space.
UPDATE: June 6, 2019, 6:36 p.m. CEST On Wednesday, ZenGo announced one more important feature: The ability to retrieve funds even if ZenGo itself shuts down. Read more about the initiative here.