Secure User Private Key Management

TL;DR

Don’t store user private keys directly on your servers! Use a combination of client-side encryption, secure key generation within the application, and potentially hardware security modules (HSMs) or trusted execution environments (TEEs) for advanced protection. Focus on letting users control their keys as much as possible.

1. Understand the Risks

Storing private keys is extremely sensitive. If compromised, attackers can impersonate your users and access their data/funds. Common risks include:

• Server breaches: Hackers gaining access to your servers.
• Insider threats: Malicious or negligent employees.
• Data leaks: Accidental exposure of keys.

2. Key Generation – User Control is Best

The safest approach is for users to generate their own keys, ideally on their devices.

• In-App Key Generation: Your application can guide the user through key generation using a strong cryptographic library (e.g., WebCrypto API in browsers).
• Hardware Wallets/Key Stores: Support integration with hardware wallets (Ledger, Trezor) or platform key stores (Android Keystore, iOS Keychain). This keeps keys off your servers entirely.

Example (JavaScript using WebCrypto API):

const key = window.crypto.subtle.generateKey(
  {
    name: "RSA-OAEP",
    modulusLength: 2048,
    publicExponent: new Uint8Array([0x01, 0x00, 0x01]),
    hash: { name: "SHA-256" },
  },
  true,
  ["encrypt", "decrypt"]
);

3. Client-Side Encryption

If you *must* store any data related to the private key (e.g., encrypted metadata), encrypt it using a key derived from the user’s password or passphrase.

• Strong Password Derivation: Use robust key derivation functions like Argon2, scrypt, or PBKDF2 to create encryption keys from passwords.
• Encryption Library: Employ well-vetted encryption libraries (e.g., CryptoJS, libsodium).

Example (JavaScript using CryptoJS):

const encrypted = CryptoJS.AES.encrypt('sensitive data', 'user_password').toString();

4. Secure Storage Options

1. Local Storage (with caution): If you use local storage, encrypt the key before storing it. Be aware that local storage is vulnerable to XSS attacks.
2. IndexedDB: Offers more security features than local storage but still requires encryption.
3. Platform Keychains/Keystores: The most secure option for mobile apps – keys are stored in a dedicated, protected hardware environment.

5. Server-Side Considerations (Minimize Storage)

Avoid storing private keys directly on your servers whenever possible.

• Public Key Only: Store only the user’s public key for encryption and verification purposes.
• HSMs/TEEs: If you absolutely need to perform operations with private keys server-side, use Hardware Security Modules (HSMs) or Trusted Execution Environments (TEEs). These provide a secure enclave for key storage and cryptographic operations.

6. Key Rotation

Regularly rotate user keys to limit the impact of potential compromises.

• Automatic Rotation: Implement automatic key rotation based on time or usage.
• User-Initiated Rotation: Allow users to manually rotate their keys.

7. Multi-Factor Authentication (MFA)

Even with secure key management, MFA adds an extra layer of protection against unauthorized access.

8. Regular Security Audits

Conduct regular security audits and penetration testing to identify and address vulnerabilities in your key management system.