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# System prepended metadata

title: Hosted Identity (&Crypto) wallets

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# Hosted Identity (&Crypto) wallets
- **Problem statement**
    - General Web3/SSI interface/wallet challenges
        - Web3 & SSI are as it's core relying on cryptographic keys 
            - that proof ownership of crypto assets and decentralized identifiers
            - humans cannot memorize or process keys, so need to rely on software/hardware to being used
        - Key management is a major challenge - need keys for every interaction - storage of keys secure, but also accessable to use them; risk to lose them vs. others get access (and steel assets, or hijacked your identity)
            - today 
                - end-user managed (e.g. mobile app, browser extenion with 12 word backup), some people use hw keys
                - often keys copied to multiple devices to access assets from multiple devices
            - often tied different to service / asset (abstraction via smart contract account or DID often not used)
        - Trusted Signing interface
            - UI to display action/intention what is being signed by the keys
            - Trust the development teams (mistakes and intentional attack)
            - Trust in distribution infrastructure (e.g. app stores); and that e.g. open source code really is used for an application on your phone
        - add on (wallet/identity ) data & services 
            - to enhance user experience, or allow certain use-cases additional **data** is required to be available 
                - history of transactions (with meta data that it not stored onchain)
                - relevant tokens
                - verifiable credentials 
                - additional blockchain networks
                - messages (inbox)
            - services
                - automations - based on certain events 
                - messaging
                - ...
        - User data (beyond wallet specifics)
            - photos, playlists, etc
- **Options today** (with specific challenges)
    - 1) Fully hosted solutions e.g. Coinbase (custodial wallets/key managements)
        - Trust in provider with data + assets
        - Usable from multiple devices
        - Access to providers often with traditional web2 security (password, 2FA token)
    - 2) User controlled (mobile apps, browser extensions, hw wallets)
        - user experience bad - new browser/device requires setup, etc. 
        - hard to manage / or less secure
            - with 12 word backup, 
            - same keys on multiple devices 
        - UX vs. security - not scalable to large audience with more critical assets/identity use-cases
    - Most offering only target SSI or Digital assets
    - SSI agents (e.g. Evernym, IDNow, ...) are centralized providers operated by a few companies with specific business models and under certain legal/regulatory oversight. 
        - who is deciding on legal/illegal of controversial use-cases e.g. drugs, prescriptions, weapon ownership, religions, etc.?  
        - who classified globally a 'terrorist' (which could lead to freezing of all assets and access)?
    - 
- **My (our?) opinion / objectives:**
    - Infrastructure of SSI & Digital assets shouldn't make judgements on legal, regularoty, etc. questions - that should happen on a higher level (application) - e.g. we don't regulate on TCP package level, but application level?!
    - Establish an SSI infrastructure that operates on cryptographic,  math, economic / game-theory level rather
        - harder to censor
        - incentives aligned between users & providers
        - choice for users (no lock-in)
    - Censorshop resistance
        - required multiple instances from different providers  (at least a data & key backup), maybe passive sufficient until activted
        - paid in same token, to reduce friction to pay independent providers 
            - e.g. protocol could ensure at least 2 independent operators + 1-2 passive backups (in case both operators collude)
    - 
- **Target Solution in 2022 **
    - Establish a semi-decentralized infrastructure with know actors (at least some from of reputation)
        - paid in (same) tokens to reduce end-user friction to add / remove / increase operators
    - Chainkey, MPC, etc. - to avoid control of keys by any party
    - Runs/compiles open source code in transparent way
    - Allows access via traditional (username/password )and modern (keys, hw) - to control defined use-cases options
        - e.g. access to read sufficient with username/password; all write transaction need to be secured by an end-user controlled key?
        - long-term just based on HW based keys (e.g. in devices like phones, or laptops)
    - Data encryption at rest
        - operation on data without decryption (likely not efficient enough today)
        - decryption only by limited set of (somewhat trusted) wallet operators to display
- **First sketch:**
![](https://i.imgur.com/4eZPUfY.png)

- **Roadmap / MVPs**
    - MVP 1 - Q1 22
        - Using WebAuth (e.g. using MacOS or iOS keys) to access an IC hosted wallet 
        - Wallet allows to create a DID (and interact with other DIDs sending/receiving DIDComm messages)
    - MVP 2 - Q2 22
        - Wallet to manage VCs (create, present, etc.)
        - Use IC as data store for VCs, other other meta-data
    - MVP 3 - Q3 22
        - add Eth keys to manage Ethereum transactions
            - like MM /Tally running on a hosted server
- **Approach** (for discussion)
    - Explore collaboration with Stoicwallet, Plugwallet or AstroX
    - **AstroX** likely closest to crypto wallet offering, without DIDs & VCs
    - Research options for data encryption keys (rather than ECSDA signing keys from Chainkey)
- 
- Research sources:
    - Dfinity / Identity 
        - Inside the Internet Computer | Identity and Authentication on the Internet Computer
            - https://www.youtube.com/watch?v=9eUTcCP_ELM
        - Community Conversations | Internet Identity
            - https://www.youtube.com/watch?v=vCyQb9IHNQY
    - Dfinity tools/services
        - https://identity.ic0.app
        - StoicWallet
            - https://www.stoicwallet.com/
        - PlugWallet 
            - https://plugwallet.ooo/
            - MM for ICP?
        - AstroX ME
            - https://63k2f-nyaaa-aaaah-aakla-cai.raw.ic0.app/anthen/login
                    - https://twitter.com/Astrox_Network/status/1460585595483435010?s=20
                    - 
