Tangem has just achieved an important milestone by securing a US patent for its private key backup technology. This advancement aims to enhance how users manage their cryptocurrency securely.
The United States Patent and Trademark Office (USPTO) granted the patent on January 28. The patent is titled “Systems and methods for transferring secret data via an untrusted intermediary device.” It describes a way for users to handle private keys or seed phrases more effectively.
Self-custody means you can store your crypto assets without relying on anyone else. You get a private key, which acts like a password to access your assets. While this gives you full control, it also comes with risks, like losing your private key or having it stolen. These risks can make it hard for more people to adopt self-custody.
Tangem’s technology aims to help users enjoy the benefits of self-custody without directly dealing with private keys. Instead, it allows for creating backup authentication devices. Key features of this patented tech include:
- A seedless backup process
- End-to-end encryption
- Trustless intermediary transfer
- Tamper-proof authentication
The technology uses cryptographic methods, like Elliptic Curve Diffie-Hellman (ECDH), to enable secure private key exchanges.
So, how does Tangem’s backup tech work? It allows the private key to be sent as secret data between two trusted devices, like a Tangem card or ring, through an untrusted device, such as a smartphone. According to Andrey Lazutkin, Tangem's chief technology officer, the term “untrusted intermediary” means that the technology doesn’t rely on the safety of user devices.
Lazutkin explains, “The card transmits the key to another card, and it doesn’t matter what device is transporting it—a phone, which one, what firmware, what device, whether it’s rooted or not, with viruses or not. The key will be encrypted and sent to another card even through an untrusted device. No one in the middle can intercept these keys.”
While the idea of private key backups could simplify self-custody, some in the community are skeptical. For example, Ledger, a well-known hardware wallet provider, faced backlash for its cloud-based private key recovery system launched in 2023. Despite the criticism, they went ahead with it.
In late 2024, Tangem also faced scrutiny when a security flaw in its mobile app exposed some users’ private keys via email. The company acknowledged the issue, attributing it to a bug in the app’s log processing, which has since been resolved.
Many Bitcoin enthusiasts hold the belief, “Not your keys, not your coins.” This means they prefer not to trust their private keys to anyone but themselves. Instead of relying on encryption and transfer methods, some choose to store their seed phrases using physical backups, like fireproof metal plates or even more advanced solutions like Shamir Backup.