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This work presents Arcula, a new design for hierarchical deterministicwallets that brings identity-based addresses to the blockchain. Arcula is builton top of provably secure cryptographic primitives. It generates all itscryptographic secrets from a user-provided seed and enables the derivation ofnew public keys based on the identities of users, without requiring any secretinformation. Unlike other wallets, it achieves all these properties while beingsecure against privilege escalation. We formalize the security model ofhierarchical deterministic wallets and prove that an attacker compromising anarbitrary number of users within an Arcula wallet cannot escalate hisprivileges and compromise users higher in the access hierarchy. Our designworks out-of-the-box with any blockchain that enables the verification ofsignatures on arbitrary messages. We evaluate its usage in a real-worldscenario on the Bitcoin Cash network.

Arcula: A Secure Hierarchical Deterministic Wallet for Multi-asset Blockchains