Arcula: A Secure Hierarchical Deterministic Wallet for Multi-asset Blockchains

TL;DR

Arcula introduces a secure, identity-based hierarchical deterministic wallet for multi-asset blockchains, enabling secure key derivation from user identities without secret exposure, and resisting privilege escalation.

Contribution

It presents a novel cryptographic wallet design that formalizes security and demonstrates practical implementation on Bitcoin Cash.

Findings

Secure against privilege escalation

Works with any blockchain supporting signature verification

Validated on Bitcoin Cash network

Abstract

This work presents Arcula, a new design for hierarchical deterministic wallets that brings identity-based addresses to the blockchain. Arcula is built on top of provably secure cryptographic primitives. It generates all its cryptographic secrets from a user-provided seed and enables the derivation of new public keys based on the identities of users, without requiring any secret information. Unlike other wallets, it achieves all these properties while being secure against privilege escalation. We formalize the security model of hierarchical deterministic wallets and prove that an attacker compromising an arbitrary number of users within an Arcula wallet cannot escalate his privileges and compromise users higher in the access hierarchy. Our design works out-of-the-box with any blockchain that enables the verification of signatures on arbitrary messages. We evaluate its usage in a real-world scenario on the Bitcoin Cash network.