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I worked at a crypto exchange, yes we used shamir shares. But probably not as sophisticated as you're thinking, there was basically one big "break glass" text document with all the keys. And then a hand-rolled software on each person's laptop to distribute the plain text and run / practice the 3/5 recovery ceremony. So anyone losing their device would be equivalent to someone quitting and require its own ceremony to reissue a key, but I don't think that ever actually happened.

We explored using smart contracts to have logic perform the 3/5 consensus rather than a cryptosystem, but that was never rolled out while I was there. Social recovery wallets in general did not take off, which was a big learning moment for me that very few people actually cared about the technology and what they really wanted was an app with as many gambling features as possible that uploaded their keys to google drive.

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> Social recovery wallets in general did not take off, which was a big learning moment for me that very few people actually cared about the technology and what they really wanted was an app with as many gambling features as possible that uploaded their keys to google drive.

People who are not HN-profile never care about the technology, and always care about usable, convenient features. The shocker is: most HN-profile people feel the same way.

Also see: https://m.xkcd.com/2501/

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Yes, I do agree with this. What rubbed me the wrong way was all the cynical people who would talk endlessly about how revolutionary the tech was and all the possibilities it opened to get others invested, but ran companies that were just casinos and actually could have simpler operations without the crypto parts! Most people in pre-NFT crypto has someone in their network who worked on an outright Ponzi scheme.
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> but ran companies that were just casinos and actually could have simpler operations without the crypto parts

But during the big buzz, the crypto parts were what got those companies any exposure at all.

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Yes. It really was a toxic mess wasn't it?
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Has cryptocurrency gone away?
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A lot of the hype has, certainly the hype that propped up the companies the thread starter was referring to.
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Ding ding! Crypto still exists, but the tech grifters have all pivoted to AI and been replaced by MAGA grifters.
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> but ran companies that were just casinos and actually could have simpler operations without the crypto parts

Creating a product for the sake of using a technology is a flawed order of operations. However, the glitz and glamour of a new money for a new internet is enticing with a lot of promise. I'm a crypto bro, but my crypto confidence has waned recently. My confidence in the USD has also waned.

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> Social recovery wallets in general did not take off

ERC7093 has finally added this

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Improving or standardizing the approach is all well and good, but if it's not natively integrated into MEW / MM / Coinbase Wallet / Phantom it's sort of irrelevant. Argent was the best attempt but they failed so bad commercially that they pivoted to a google drive recovery mechanism and changed their name.
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Coinbase does support ERC-4337 (which is actually the ERC I thought I mentioned above, apologies)
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> Also see: https://m.xkcd.com/2501/

The other day a neighbor asked me about AI. I said I wasn’t really up to date with things anymore. They asked: like what things? And then I said: like the Astra model that OpenAI released yesterday, I know nothing about it. And they were like: “bro, yesterday?! And you feel you’re not up to date?! Pfff”

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A better solution (than Shamir secret sharing) are threshold signatures.

The difference is that with Shamir you have to reconstruct the private key in one place before you can sign. With threshold signatures multiple servers can collaboratively sign without ever reconstructing the private key in a single place.

For chains like Solana, Aptos, SUI that use ed25519 (schnorr signature), there's a pretty clean solution called FROST.

For Bitcoin and Ethereum/EVMs that use ECDSA it's a bit trickier but there's been a lot of research recently, so there are solutions.

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Worse when crypto exchange bosses go missing https://archive.is/lPpRz
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Large exchanges handle this very simply: If they have the keys, it goes to the inheritor(s) once they get a court order. If they do not, it goes nowhere
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but what sort of people keep their bitcoins on the exchange ? the whole point is about not being seizable by dirty governments...
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Traders; low information investors; people who are not 100% confident in their personal infosec and not willing to lose their bitcoins on their own.

"Not being seizable" hasn't really worked out for bitcoiners who've been arrested. Or for that matter robbed at gunpoint.

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> "Not being seizable" hasn't really worked out for bitcoiners who've been arrested. Or for that matter robbed at gunpoint.

This seems orthogonal to the ability to seize assets.

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There are plenty of legends of old wallets "waking up" due to the person getting out of prison, as it seems the only plausible way someone can sit on 30 BTC for 10-15 years, through all the news and price movements, without touching it once. One would only expect to hear about the successful seizures law enforcement makes.
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Pretty much everyone. There's a reason people lost money with ftx, Mt gox and other scams.

Managing your private keys is cumbersome, error prone, requires some computer literacy, the list goes on.

Tbh I have been kind of impressed by how fast L2 businesses brought back centralisation in every possible way. I guess it's more efficient for them.

In the same way, the internet was supposed to be decentralised, everyone being in charge of their own servers. But in practice nobody has the time to set up their own MX servers.

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> but what sort of people keep their bitcoins on the exchange ? the whole point is about not being seizable by dirty governments...

For most people, cryptocurrency is just another stock market / betting app.

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Most people don't care about that at all
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"Number go up" people
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People who want to be scammed.
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Hype vibe investors, probably.
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> not being seizable by dirty governments

If you believe that, I have some land to sell you

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