This Technical Edition summarizes core design principles, cryptographic internals, and practical integration notes for Ledger-compatible hardware wallets. It is written for engineers, auditors, and developers integrating secure key management into applications. The document focuses on threat model assumptions, deterministic key derivation, transaction signing flows, firmware partitioning, and API interaction patterns.
Threat model and root of trust
Ledger devices assume the host environment (desktop, mobile) is untrusted. The secure element (SE) inside the device provides a hardware-enforced root of trust: tamper resistance, isolated execution, protected key storage, and a secure random number generator. Private keys never leave the SE and all signing operations occur inside it. The device authenticates firmware with signed manifests and enforces a secure boot chain to prevent unauthorized code execution.
Deterministic wallet structure
Wallets are based on BIP-32 hierarchical deterministic (HD) key derivation and BIP-39 mnemonic seeds. A 12–24 word mnemonic encodes the seed entropy; the seed is expanded into a master key and chain code using PBKDF2 with HMAC-SHA512. Derivation paths (BIP-44, BIP-84) determine account and address generation. The SE supports hardened and non-hardened derivation; hardened derivation is recommended for maximum isolation when combined with the SE.
Signing flows and UX
Signing is a two-party protocol: the host constructs an unsigned transaction, sends it to the device for review, and the device displays human-readable information (amount, recipient, fee) on-screen. The user manually approves each transaction with physical buttons. Only after approval does the SE perform the signing operation, returning the signature to the host. This user-in-the-loop pattern mitigates remote host compromise.
Firmware and partitioning
Firmware is split across a verified bootloader, a signed kernel that enforces policy, and isolated application partitions. Only authenticated updates are accepted; each update package is digitally signed and checked by the bootloader. Critical secrets and signing keys are kept in the SE and cannot be altered by firmware updates. Auditors should review bootloader logic and update server signing keys.
APIs and integration notes
Integration is typically via an HID transport or vendor SDK. The host sends APDUs (Application Protocol Data Units) that the device interprets. Keep host-side responsibilities minimal: construct canonical transaction bytes and perform local verification of returned signatures. Use challenge-response and nonce binding to avoid replay attacks. Rate-limit requests and implement backoff to protect against host-level denial of service attempts.
Operational recommendations
Operators should enforce secure provisioning of devices, enable passphrase protection, and maintain a tightly controlled update signing key. For custodial services, consider multi-signature architectures and hardware security modules as complementary controls. Regular firmware audits, penetration testing, and supply-chain verification reduce risks posed by counterfeit hardware.
// Example: pseudo-APDU request to sign a tx CLA=0xE0 INS=0x02 P1=0x00 P2=0x00 DATA=[derivationPath || rawTx]