Generating Your Own Private Key
Every cryptocurrency company faces criticism of one kind or another, and Ballet is no different. Sometimes the criticism is justified, and sometimes it’s not. One of the claims that critics of Ballet have repeatedly made is that Ballet non-electronic cold storage cards are not safe because, they say, Ballet generates and keeps the private keys. This claim is unequivocally false. At no point in the manufacturing process does Ballet generate private keys, therefore it is impossible for Ballet to keep the private keys.
To keep private keys or allow employees to access them would be a major security risk and legal liability for Ballet, so we specifically designed our manufacturing process based on the Bitcoin BIP38 two-factor encoding method to ensure that this is impossible. Ballet products have proven to be safe and reliable; since the first Ballet product was released in 2019, there has never been a reported incident of funds lost due to security failure, fraud, or product defect. For further information on Ballet’s two-factor manufacturing process, please visit the Ballet 2FKG webpage.
The critics of Ballet will typically advise people to use electronic hardware or software wallets that allow you to “generate your own private keys” instead. However, despite common understanding, the belief that electronic hardware and software wallets allow you to generate your own private keys is not technically correct. Hardware wallets and the software that runs on the computer they interact with are created by the wallet company, therefore it is more accurate to say that the private keys are generated locally with the user, but not by the user. This may seem like a minor distinction, but the implication is that the user must fully trust the security and integrity of the electronic hardware wallet device and the software that accompanies it. You must trust that the manufacturer is competent enough to make a flawless device and that they do not have malicious intent to sell a product that is designed to steal your crypto. There is no such thing as a truly trustless hardware wallet.
However, despite common understanding, the belief that electronic hardware and software wallets allow you to generate your own private keys is not technically correct.
The only way to truly “generate your own private key” in a trustless manner is to do it by hand, without computer assistance. This is a very tedious and complex process. You would need to use a physical random number generator, such as dice or coins, and perform many mathematical calculations by hand. According to esteemed Bitcoin developer Pieter Wuille, “computing a public key from a private key by hand would take something like a month of full time work, if done by hand, with the help of books with precomputed tables.” Then you would also want to triple check your calculations to ensure that you haven’t generated an invalid address, which would make any coins sent to that address inaccessible forever.
The number of people who have ever actually generated their own private key without using computer software and used it for a real Bitcoin transaction can probably be counted on one hand.
Although it is impractical to generate private keys in a perfectly trustless manner, we should still take the utmost care to choose the most trustworthy crypto storage solution that is suitable for each individual situation. There is always a trade-off between security and convenience. Several important factors to consider are: your own level of expertise with crypto technology; the amount of funds to be stored; how long you intend to store it; how often you will need to access it; what level of privacy and physical security do you have; and who else beside yourself do you trust to have access.
If you are an experienced crypto user and you want to store a large amount of value, you would probably be willing to sacrifice some convenience for better security. If you are inexperienced, your priority would probably be to choose the most user-friendly option; inexperienced users who attempt to use complicated crypto storage products too often make unnecessary user errors that result in loss of funds. If you intend to keep your crypto in cold storage to be inherited by your children, you will need to make careful preparations to ensure that they are able to access it according to your plan.
Whatever your individual needs are, it is essential that you do thorough due diligence of each company whose crypto storage product you are considering to use. Past performance is one of the most important indicators to consider, but that alone is not a guarantee of future results. Transparency and accountability are other attributes of trustworthiness that you should demand from every crypto storage product provider. Are they honest and forthright about how their product works and what its strengths and weaknesses are? Does the company operate in a regulated jurisdiction where they would be subject to civil and criminal liability for behavior that causes users to lose funds?
As mentioned earlier in this article, Ballet has never had a reported incident of customer funds lost due to security failure, fraud, or product defect. Every aspect of the company has been structured in a way that minimizes risk and maximizes trust, and we have designed our products to achieve the ideal balance of security and convenience. We are fully transparent about how Ballet cold storage products are created using the time-tested, open-source BIP38 two-factor encoding method, so that you can have complete confidence in the underlying technology that secures your crypto assets. Ballet is based in the United States, operating in a regulatory environment with strict accountability for fraud and other forms of malfeasance. Based on these facts, you can responsibly trust Ballet products to serve your cryptocurrency storage needs.
