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To: "Bitcoin Development" <bitcoin-development@lists.sourceforge.net>
References: <CAAS2fgQFOei6we8nfSr9DuQuHEjXT+G8_XGMk9um14DBgRuPyA@mail.gmail.com>
Date: Fri, 16 Aug 2013 12:37:50 -0700
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From: "Jeremy Spilman" <jeremy@taplink.co>
Organization: TapLink
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Subject: Re: [Bitcoin-development] BIP 32.5
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I personally like the full-measure of eliminating the "CS-PRNG" entirely  
 from signing. If the "random" component is assumed to be untrusted,  
keeping it in there adds no value, while eschewing the main benefit of  
deterministic signing (ease of testing, auditing)

This just leaves the CS-PRNG at the heart of the security system -- when  
generating the root master key of an HD wallet. Adding to what Mike said,  
a single invocation of a CS-PRNG driving all subsequent keys increases the  
attack value if that one invocation turns out to be weak. By comparison,  
at least compromised DSA signatures were one-off events which didn't allow  
theft of funds beyond the one compromised address.

Cumulative / rolling entropy collection over time through multiple CS-PRNG  
invocations, or multiple entropy sources, could serve to recover from an  
"occasionally weak" CS-PRNG. I've read claims that this is bad practice  
because a single low entropy source can take entropy out of the result,  
but this seems like FUD. If you're using SHA512-HMAC to hash chain a few  
entropy sources, even "return 4; // chosen by random dice roll" is not  
going to help, but it's not going to hurt.

The DSA 'repeated-k' basically advertises itself on the block-chain and  
people were actively scanning for this weakness, whereas a weak key in the  
BIP32 root might not be as apparent, so exploitation may be more  
difficult, but also more insidious. Of course this depends on the exact  
failure mode of the CS-PRNG being used -- I wonder if anyone is searching  
for BIP32 keys based off of one of the 32k Debian random numbers being  
used as a master key?

Smartphones in particular have lots of sensors which could provide  
entropy. For example, if you pulled 64 bytes from "secure random", you  
could at least HMAC that with the SHA512 of a picture or a short video  
sample taken by the user. I'm guessing some people would cringe at this,  
but it seems to me like it provides some measure of protection to justify  
the increased code complexity.

TL;DR - Really like the idea of minimizing CS-PRNG use whenever possible  
(deterministic signing) and also would love to learn more best practices  
for placing less trust in the so called "CS-PRNG" when we do have to use  
them.

Thanks,
Jeremy