bitcoin

How safe is Sparrow's wallet encryption?

pillar

> From what I understand, this is not what is used to encrypt the wallet, but rather the hashing algorithm used on the wallet password.

That's a very good find by @radentor but you're right, the quoted docs don't mention how the derived key is used to encrypt the wallet afaict.

Btw, I wouldn't call [Argon2](https://en.wikipedia.org/wiki/Argon2) a hashing algorithm (at least in this context here) even though it can be seen as one. All key derivation functions (KDFs) are very similar to hashing algorithms since they try to output something very random in a deterministic way - like hashing algorithms do. Afaik, KDFs only additionally _guarantee_ certain properties, unlike hashing algorithms. A hashing algorithm does not have to be as secure as a KDF.

So basically, Sparrow uses Argon2 to derive a key from your password. And this key is used to encrypt the wallet. However, as you mentioned, the quoted docs don't mention which algorithm is used for encryption, that's right.

See [this](https://security.stackexchange.com/questions/95410/what-is-the-difference-between-key-derivation-function-and-salted-hash) and [this question](https://crypto.stackexchange.com/questions/70716/key-derivation-functions-vs-password-hashing-schemes) on StackExchange for more info regarding KDFs vs hashing algorithms.