Undisputed king of the NFT and Crypto hardware wallet, Ledger, has found itself on the wrong side of controversy after it announced a new seed phrase recovery feature. Leading many in the Web3 community to decry its disregard for the core principles of crypto.
In order to address the elephant in the room, Ledger has unveiled a new subscription plan for Nano X users that involves a novel seed phrase recovery feature. Essentially, allowing subscribers to split their encrypted private keys into three, which are then secured by Ledger and 2 third party custodians, Coincover and EscrowTech. Then, in the event of a lost or forgotten key, users can recover access to their wallets through an identity verification procedure involving a government issued ID.
Exciting update, Ledger has a new product, Ledger Recover, that’s launching soon: https://t.co/nT1VHnnSYz
🧵Here’s what Ledger Recover is and what it isn’t, explained by @P3b7_ & in the thread below. pic.twitter.com/RW1w07H6pK
— Ledger (@Ledger) May 16, 2023
Crypto Twitter Up in Arms over the New Ledger Seed Phrase Recovery Feature
The immediate backlash from the NFT and Crypto communities saw the move as a step away from Ledger’s core ethos. Fundamentally, at odds with its long-standing principle of owners’ seed phrases never leaving the device. While others have voiced concern that the feature could open a ‘backdoor’ into the software even for those who’ don’t opt into the service.
In addition, further uproar was expressed by the loudest voices in the community regarding the requirement of a government issued ID that could essentially link users identities to their crypto assets. While, further questions were also raised with regards to the potential for those with access to the linked ID to gain access to the wallet.
The Ledger Recovery Feature Uproar Forces Discussion on Wallet Access
Despite the many concerns regarding Ledger’s new seed phrase recovery feature, it has forced a discussion on the previously mentioned elephant in the room. Namely, how to recover NFTs and other digital assets in the event of a lost or forgotten seed phrase. A core sticking point for run-of-the-mill non-crypto folks should they want in on the action without remaining at the mercy of a centralized exchange.
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Decentralised human, Explorer, Adventurer.