Passkey — What Does It Mean in Crypto?

In the context of crypto, a passkey is a passwordless digital credential that uses public-key cryptography to provide a more secure and user-friendly way to access your cryptocurrency accounts and other online services. It replaces traditional passwords with a pair of cryptographic keys: a private key stored securely on your device and a public key shared with the service. You authenticate by using your device's unlock method, like biometrics or a PIN, to sign a cryptographic challenge, making it resistant to phishing and credential theft.

How Passkeys Work in Crypto

• Key Pair Generation: When you create a passkey for a crypto platform, your device generates a unique pair of cryptographic keys.
• Public Key Storage: The public key is shared and stored on the crypto service's servers.
• Private Key Storage: The corresponding private key is stored securely on your device, often in the device's secure element or a password manager.
• Authentication: To log in, the service sends a challenge, which your device's private key signs.
• Verification: The service verifies the signature using the public key, confirming your identity without ever transmitting or exposing your private key.

Benefits in Crypto

• Enhanced Security: Passkeys are tied to a specific website or application and require physical proximity and the user's unlock method, making them highly resistant to phishing and credential stuffing attacks.
• Passwordless Access: Eliminates the need to remember or manage complex passwords, simplifying account access.
• Simplified Login: You can log in to your crypto accounts by simply using your device's familiar unlock process, such as a fingerprint scan or facial recognition.
• Automatic Recovery: Passkeys can be automatically synced to your account or password manager, allowing you to recover access to your crypto wallet on a new device if your primary device is lost or damaged.
• Domain Specificity: Passkeys are designed to work only with the intended domain, preventing malicious sites from using a stolen passkey to access your account.