This solution is particularly relevant given the reliance on BIP39 seed phrases for wallet backup among individuals storing substantial amounts of their savings on the blockchain. The traditional method of backing up wallets with a BIP39 seed phrase presents significant risks, including the potential for irrevocable loss of funds if the seed phrase is lost or stolen. Additionally, the necessity of entrusting the seed phrase to a third party for inheritance planning poses further security concerns.

Secret splitting addresses these issues by allowing a 2-of-3 split of the seed phrase into three "shares", where any two shares can be used to recover the full seed phrase. This method ensures that no single share reveals information about the seed phrase, facilitating secure storage across separate locations and making trust-minimized inheritance feasible. However, the absence of a wallet-agnostic standard for secret splitting and concerns over entering a BIP39 seed phrase into an electronic device for splitting purposes have limited the adoption of this approach.

Penlock's development was inspired by Codex32 and aims to fill this gap by providing a user-friendly, analog method for secret-splitting BIP39 seed phrases, compatible with all existing wallets. By requiring only basic tools such as a printer, craft knife, scissors, pencil, and paper, Penlock enables users to execute the secret-splitting algorithm without the risk associated with electronic devices. The project, rooted in extensive research and prototype testing to balance trade-offs such as execution speed and ease of use, positions itself close to an optimal design solution for secure seed phrase management.

As an open-source initiative, Penlock invites cryptographers, developers, and enthusiasts to engage in peer-reviewing and early testing ahead of its public release slated for Q3 2024. Feedback and comments are encouraged to refine Penlock further, underscoring its commitment to community collaboration and continuous improvement in blockchain security practices. For more information or to participate in the beta release, visit https://beta.penlock.io.