A Breakthrough in Crypto Self-Custody: Tangem, a self-custodial cryptocurrency wallet, has just hit the jackpot of patents in the United States, considering the recent grant of its revolutionary private key backup and transfer technology.
The patent, titled “Systems and methods for transferring secret data via an untrusted intermediary device,” was granted on January 28 by the USPTO. This opens up a new, innovative way of managing private keys, designed from the outset to make self-custodial wallets more usable and secure-a solution to one of crypto’s biggest pain points in securely managing private keys.
Self-Custody: Tackling the Biggest Challenges
Self-custody gives full control over crypto assets through a private key provided to the user. However, that very responsibility is fraught with dangers like theft or loss of the key, which have been huge barriers to greater mainstream adoption. Tangem’s patented solution tackles most of these issues by removing the need for users to handle seed phrases directly.
Instead, it uses a seedless backup, created via an end-to-end encrypted, trustless intermediary transfer, and tamper-proof authentication. The technology makes use of the most secure cryptographic techniques currently known, including Elliptic Curve Diffie-Hellman (ECDH), for securely transferring private keys across devices.
But the system, protected by a patent, enables encrypted private keys to be securely transferred between trusted devices, such as Tangem cards, via an untrusted intermediary, like a smartphone. According to Tangem’s Chief Technology Officer, Andrey Lazutkin, the process remains secure even if the intermediary device is compromised.
The key will be encrypted and sent safely onto another card, whichever device transports it. Not even a rooted phone with viruses will be able to intercept the keys,” Lazutkin said.
The solution is trying to make self-custody easier by avoiding having the user directly handle private keys while still offering high levels of security in this way.
Reception and Concerns in the Community
That doesn’t mean this has always sat well with skepticism in the crypto community regarding the idea of a backup for one’s private keys. In 2024, Tangem fell under criticism for a security hole which had shown private keys of some users. Similar inventions-like Ledger’s cloud-based recovery-have faced similar outcry over perceived security risks.
Nevertheless, Tangem’s patented technology is a step in the right direction toward achieving a balance between ease of use and security in self-custodial solutions for broader crypto adoption.
