Rekeying feature of Algorand: Its security impact.
To understand the concept of rekey as a killer feature of Algorand technology, it is pertinent to take a glance at the meaning of private key as we often refer to key in place of private key as one of the blockchain terminologies.
WHAT IS A PRIVATE KEY?
If you have no previous experience in cryptocurrency or blockchain in general, your private key is that long string of numbers and letters jumbled together at random. A private key usually have a corresponding public key which serves as an address or perhaps an account identifier with which users can make and receive crypto payments to and from others. In comparison with the traditional banking system, your public address is your bank account number while your private key is the pin or password that enables you to make withdrawals. Worthy of note is that Security is a very crucial factor in the cryptocurrency space and sometimes mistakes happen while safeguarding one’s key
WHAT IS REKEYING?
This is a powerful protocol feature which enables a cryptocurrency user account holder to maintain a static public address while dynamically rotating the authoritative private spending keys. Taking a real world scenario as case study, you may have a security threat and feel that your house keys has been compromised, rekeying is one of the options that will be presented to you. Rekeying a lock means to change the working key of the lock to a different key, without replacing the lock itself. You keep the same lock but the old key will no longer operate it. In this case, the lock is the public key which may be disseminated widely and the key is the private keys which should be known only to the user.
When it comes to cryptocurrencies, a private key is meaningful if it is kept safe, or useless if it is misplaced as your funds remain inaccessible forever. Rekeying is important in cases such as when;
- There is a security emergence as a result of tampered or mishandled keys.
- The contract between you and a partner that has access to your keys is over, they leave or you have a fall out.
- The private key file is deleted, destroyed or lost.
ALGORAND REKEYING MEASURE
Algorand rekeying offers a seamless, easier experience for users and custody providers by allowing flexible changes of private spending keys anytime without changing public addresses. Algorand rekeying is unique because among blockchain platforms-as-a-service. This feature operates in layer-1 which solves operational inefficiencies by allowing users to change their private spending key without the need to change their public address. The merit of Algorand rekeying includes; security, flexibility, continuity, multiple use, reassigning of ownership and operational efficiency.
- Security: – Users are able to change the security posture of an account and avoid theft or losing funds.
- Flexibility: – Users can alter the private spending key anytime without needing to change the public address.
- Continuity: – A user can continue using one public address and keeping assets in the same public address for as long as they choose without fear of tampering.
- Multiple Use: – A family may hold their Algo in a multisig wallet, where each family member is assigned their own private key. Different keys can be assigned to have different spending limits.
- Reassigning Ownership: – A user has the ability of reassigning ownership of a contract and often done in a larger context. With blockchain, accounts can now have ownership reassigned in a trustless manner and in the context of atomic transfers or settlement.
- Operational Efficiency: – A user can easily maintain an existing public address as identifiers for other people and custody providers that continuously transact with the public address.
HOW CUSTODY PROVIDERS CAN BENEFIT FROM ALGORAND REKEYING
Custody providers that includes banks, exchanges, savings associations, registered broker dealers, and futures commission merchants can benefit greatly from these feature in the following ways;
- Being able to keep their users private spending keys cold at all times while only needing to manage one public address key.
- The ability to eliminate the chain of old public address keys from having to move funds after using the private spending keys.
- Enabling standardized key rotation schedules depending on security posture. This means that a company can institute a monthly key rotation if and when desired.
- Eliminating complex off chain solutions created to maintain a single public address key but give more control over the private spending key.
- The ability to create and set up accounts for users ahead of time and trustlessly by reassign them when needed.
An Instance rekey is used
Peter, an Algorand user generates an account. He has a feeling that his private spending key may have been compromised or exposed, all Peter has to do is to simply issue a special transaction that registers a new private spending key for his existing public address.
Will this feature shoot Algorand to the sky?
Undoubtedly, this is a pretty powerful exceptional feature, highly attractive for both traditional and decentralized finances. At the moment, with other blockchain platforms, it is practically impossible to take back control of an account from someone you no longer desire to own access to it but is made possible with Algorand rekey attribute. You can transfer your account ownership or partial access to another party in a trustless manner.
Onboarding large user bases for projects that are moving to Algorand from another blockchain or more traditional technology is made easier and ensures as little friction as possible is passed to them during the transition. Again, it could also be used to automate crypto inheritance, once Algorand introduces external oracles that would be able to have access to a data source that tracks official death records. This rekeying feature is believed to have made Algorand a viable competitor in the DEFI space.
Also, the Algorand stateful smart contact has a higher potential when compared to other smart contract platforms as it is integrated into the base layer, which allows them to run extremely fast with minimal latency. The Algorand chain has no second class transaction. Developers are able to work on decentralized applications not having to wait for the entire blockchain to sync. It however relies on the size which may take hours or days to complete.
Algorand is a permissionless blockchain that requires minimal computational power to join. It is the first open permissionless, pure proof of stake blockchain protocol that without forking, provides the necessary security, scalability, and decentralization needed for today’s economy.