Emerging Trends in Cryptocurrency: Visual Seed Phrases
By: Roger A. Hallman
1 Introduction
The growth and adoption of blockchain technologies and cryptocurrency since Bitcoin’s public release in 2009 has seen many people “becoming their own banker,” as they utilize one or more cryptocurrency wallets to manage their digital assets. One of the most ubiquitous experiences for any cryptocurrency enthusiast is receiving and recording their wallet’s mnemonic seed phrase [10], a string of words which enables them to backup and recreate their wallets. Seed phrases are imperative to the entirety of the cryptocurrency and decentralized finance ecosystems.
However, for their importance, seed phrases face limitations and weaknesses. For instance, text-based seed phrases are seemingly random strings of words which are not likely memorable, and this had figured into many instances of lost Bitcoin [12]. Seed phrases may be susceptible to phishing attacks [8], enabling criminals to abscond with a user’s cryptocurrency. Visual seed phrases [6] use images, symbols, or abstract patterns rather than text to serve as the backup and security for digital assets held in cryptocurrency wallets.
In this article, we will introduce the reader to visual seed phrases. In particular, we will describe how text-based seed phrases are derived, and then connect them to visual seed phrases. We will explore the use of visual seed phrases in both the legitimate cryptocurrency economy, as well as the use of visual seed phrases by criminal actors and the challenge that this poses to law enforcement and digital forensic professionals.
2 Background
As has been pointed out in earlier articles [3], the “crypto” in cryptocurrency refers to the use of cryptographic building blocks in almost every aspect of the ecosystem. Cryptocurrency wallets rely on deterministic key generation protocols to provide secure, user-friendly mechanisms for managing digital assets [10]. Seed phrases are human readable strings which represent the entropy used to derive a wallet’s private key. These strings will typically consist of 12, 18, or 24 words selected from a standardized wordlist (e.g., BIP-39 [7]), and are meant to bridge the gap between human cognition and cryptographic precision.
The seed phrase selection process begins with a randomly generated entropy value which is passed through a key derivation protocol to generate the seed phrase. This value is then used as input to deterministic algorithms (e.g., BIP-32 [13]) to derive a hierarchical structure of private and public keys. While different wallets and blockchains will utilize specific derivation protocols, these processes enable users to access multiple cryptocurrency addresses without having to remember complex cryptographic details.
Text-based seed phrases are the de facto industry standard, however they are not without security vulnerabilities. Threats such as phishing [8], physical theft, and brute-force attacks against poorly chosen entropy have led researchers and enthusiasts to explore alternative representations, such as visual seed phrases.
Visual seed phrases encapsulate the entropy needed for private key generation with visual representations—images, patterns, or graphical elements—rather than text. This idea is not inherently new, as there are decades’ worth of research on graphical passwords [9] and visual cryptography [4]. However, the application of these ideas to cryptocurrency may prove to be the most successful real-world application of these ideas. There are also several considerations which must be accounted for.
The derivation process for visual seed phrases need to map the underlying entropy to graphical elements using protocols which ensure high entropy preservation. Entropy bits can encoded as color values, pixel intensities, or geometric arrangements using algorithms such as Perlin noise [11] or fractal generation [5] to encode the entropy value. Encoding methods must ensure that any changes in entropy (e.g., due to bit flips) result in significantly different visual outputs to resist forgery.
In order to reconstruct a private key from a visual seed phrase, it must be interpreted by a program or algorithm capable of reversing the encoding process. However, different systems may encode and decode visual seed phrases in non-compatible ways, which raises concerns about standardization and interoperability. (This is also an issue with text-based seed phrases. We have mentioned BIP-32 and BIT-39, however there are a multitude of derivation protocols used by different cryptocurrencies.)
Visual seed phrases use human visual memory and enable users to offload seed phrase storage to innocuous artifacts (for instance, an artistic poster print). This gives investors and enthusiasts a convenient way to backup and secure their digital assets, all the while reducing their reliance on easily misappropriated text-based mnemonics. While visual seed phrases offer legitimate benefits, they are also ripe for misuse by criminals seeking to conceal or obscure cryptocurrency holdings from law enforcement, or even other criminals.
The same properties that make visual seed phrases appealing to users also pose significant hurdles for forensic investigators. For instance, criminals can exploit visual seed phrases to embed cryptographic keys in inconspicuous media. Techniques such as image or multimedia steganography [2] allow cryptocurrency keys to be hidden within the metadata or pixel values of images without visibly altering the image. Unlike textual seed phrases, visual counterparts may not immediately reveal their function, especially when encoded in complex or abstract forms. There are no standardized protocols for visual seed phrase encoding and decoding, which means investigators cannot rely on universal tools to extract entropy from visual data.
3 Visual Seed Phrases and Digital Forensics
Visual seed phrases present unique challenges to law enforcement and digital forensics investigators, who need to adopt innovative strategies to discover and analyze visual seed phrases when they suspect that cryptocurrency may be a part of their investigation. Advanced imaging techniques, such as image entropy analysis [1], can help identify visual artifacts that may encode seed phrases. Similarly, machine learning models trained on known visual seed phrase patterns could flag suspect images for further scrutiny.
Investigators need tools capable of extracting and decoding entropy from visual data. Open-source libraries and custom scripts for steganalysis and image-to-data conversion may be applicable to meeting these challenges, or new tools may need to be developed. Contextual clues, such as the presence of cryptocurrency wallets or related software on a suspect’s devices, may indicate that visual seed phrases are in use. Correlating image metadata or file access timestamps with other digital evidence can provide leads to investigators as they search for evidence of visual seed phrases. Finally, forensic investigation teams must stay abreast of developments in visual cryptography and steganography to ensure their effectiveness against emerging techniques.
4 Conclusion
Visual seed phrases stand at the intersection of cryptographic security, usability, and artistic expression. Seed phrases are ubiquitous throughout the cryptocurrency ecosystem, but suffer from security shortcomings. Visual seed phrases help to address these shortcomings, though they do present new and unique challenges to law enforcement and forensic investigators. These challenges are not insurmountable, and further research in image analysis, steganalysis, and machine learning will undoubtedly see the development of tools which can be used to discover and extract visual seed phrases in seized evidence.
This article is meant to introduce the reader to visual seed phrases, as well as serve as a call to action to computer scientists with research interests digital forensics to investigate and engage with the complexities of visual seed phrases. In addition to introducing the reader to visual seed phrases, we covered textual seed phrase generation. We also discussed the intricacies of visual seed phrases in digital forensic investigations, as well as technological tools which may assist investigators as they search for, and discover, visual seed phrases.
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