At the Rare Evo event in 2024, Charles Hoskinson, the Cardano founder, introduced a new challenge for the cybersecurity community.
The Cardano founder revealed a $1 million bounty for any individual capable of breaching the newly released Lace Paper Wallet, a product designed with advanced encryption features. This challenge is part of a broader initiative to test and showcase the security of the wallet, which uses PGP encryption to safeguard private keys.
If you can hack it; You can keep it! 1 million dollars! https://t.co/TTtHocHHbs
— Charles Hoskinson (@IOHK_Charles) August 17, 2024
The Lace Paper Wallet, generated through Cardano’s Lace platform, incorporates both a public and private QR code. Notably, the private key is encrypted using PGP, providing a higher level of protection comparable to that of an encrypted email.
In partnership with Moneta USDM, $1 million worth of USDM has been stored in the paper wallet, forming the prize for this hacking contest. The contest is open until the close of the year, allowing participants ample time to test their skills against the highly secure platform. If someone manages to bypass the security, they will be able to claim the full amount.
Paper Wallet Security Against Replay Attacks
During his speech, Hoskinson addressed the vulnerabilities of standard paper wallets, particularly replay attacks. In these attacks, a printer could reproduce a previously printed key, creating an identical wallet copy.
By implementing PGP encryption, the Lace Paper Wallet counters this issue, ensuring that even if a duplicate is created, the wallet remains inaccessible to unauthorized users.
The PGP encryption also allows users to store their private keys on devices like YubiKeys securely. Furthermore, the wallet can be saved as a PDF for secure digital storage. Hoskinson described these measures as a breakthrough in paper wallet security.
BitBoy’s Public Challenge to Hoskinson
Meanwhile, days before the announcement of the bug bounty, Hoskinson found himself in a public clash with crypto personality Ben “BitBoy” Armstrong. BitBoy, who had previously criticized Cardano, challenged Hoskinson to a physical fight following comments the Cardano founder made about Armstrong’s stance on the project.
Despite the provocations, BitBoy acknowledged that there was no ill will between him and Hoskinson, suggesting the challenge was meant more for entertainment than personal conflict.
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