Introduction

Too many funds and accounts are lost with the loss of private keys, and account recovery offers a solution to most of these problems without any significant drawbacks. Account recovery was first introduced to the crypto world in early 2021 and is now being slowly implemented in real applications. What is account recovery, and how can you use it to protect your funds? Read all about it in this fundamental article about account recovery!

What is account recovery?

Account recovery is a feature that allows users of a blockchain to regain access to their wallet even if they forget or lose their seed phrase, which is a set of words used to generate the private key to access their wallet. With account recovery, you can set up alternative methods to access your wallet, such as linking it to your phone number, email address, or other personal information, or sharing parts of your wallet with trusted friends or organizations.

Account recovery is something you don’t use when using your non-custodial wallet. You have complete control over your wallet and can make transactions like you are used to when using any other “traditional” wallet.

So what happens when you somehow lose your seed phrase? Normally, you wouldn’t be able to get your wallet back, but with account recovery, you can use a combination of different recovery options to get access to your otherwise lost wallet!

Let's dive a little deeper into the fundamentals to see how this technology is safer and more user-friendly than the old recovery phrase.

The technical side of account recovery

Account recovery is the way you get access to your cryptocurrency wallet again when you can’t sign transactions anymore. Your wallet acts like a digital safe where you keep your money, and the recovery process only starts when you lose your private key, which is like the key to open your safe.

What is signing power?

Your private key gives you the power to sign transactions and interactions, which means you can move your money around. Everyone who has access to this private key has access to your money. You can split your private key (and hence your signing power) into smaller pieces, which can be distributed and stored decentralized to be accessed at a later time.

So, how does account recovery work?

To recover your account, you usually use automated code on decentralized servers. This automated code holds the digital agreement that only gives you a new private key if you can prove that you are the owner of the account. You can do this by proving ownership over personal information like your email, phone number, or trusted friends.

The is best understandable with an example:
You could set up your account recovery to require 33% signing power from your pin code, 33% from your email, and 33% from your friend. If you lose your private key, you can call the smart contract with this information and it will give you a new private key. You can set a threshold for the amount of signing power required to recover your account, giving you more control over the process.

Popular distribution options are:
• Other devices (phone/laptop/pc)
• Friends or family members as guardians
• Trustworthy institutions or organizations
• Personal info (biometrics/pin code/phone numbers/email/questions)

By assigning partial signing power to any combination of these options you are able to recover your account when you lose your private key! It’s still not impossible to lose your account, but with account recovery, it just became a lot harder!

Why is account recovery safer than storing seed phrases manually?

Most accounts get hacked because their private key is compromised, which is usually stored in online locations like a Word file, screenshot, or cloud storage server. Having an account recovery option removes the need to store private keys, hence removing the risk of it being compromised and losing your money. You improve security from just your private keys to a combination of multiple validation methods!

I hear you ask; “How is distributing signing power to my friends safe? They can conspire against me and take over my wallet, right?”

The chances of this happening are very slim. If you distribute signing power over, let's say, 6 trusted guardians, and one decides to take over your wallet it is an almost impossible task to retrieve the information from the others. These people don't know each other, and retrieving this information without triggering anyone warning you is almost impossible. Combine this with other signing options like devices and organizations, and you have an almost foolproof system that can keep your private key safe!

How do we use account recovery in Beans?

Beans is one of the early adopters of this technology, being the second wallet on the

Stellar Development Foundation

ledger to enable the account recovery feature!

The current account recovery options available in the Beans app is a combination of an email, a phone number, a pin code, and a second email. You are able to recover your wallet with just your email and pin code, and the phone number and secondary email are only used to verify your primary email or pin code in case you forgot. We require everyone to set up this information to enforce the security and recoverability of your account!

To enable this technology, the validation servers have to be set up in a decentralized manner. Therefore, Beans has partnered up with Public Node, which is a non-profit organization on the stellar network that is running the second server necessary to enable account recovery in the app. A big thanks to Public Node for the amazing help they have been when setting this up!

In conclusion

Account recovery is a new technology that can help with a lot of the complexity surrounding non-custodial wallets. It’s a lot safer to use than storing a seed phrase or private key and can bring many advantages like less risk of getting hacked, less risk of losing your private key, and a higher chance of restoring an otherwise lost wallet. It is a feature that makes blockchain accessible to the wider public, as less technical knowledge is needed to use non-custodial wallets.

If you want to read more about the account recovery feature in beans please refer to our dedicated Beans account recovery article to see the details! Are you curious about trying it out for yourself? Download the app now at beansapp.com/download!