Jul 2, 2025
What is Passkey?
A passkey is an authentication method proposed and standardized by the FIDO Alliance to create a safer internet environment. Instead of the traditional method where users manually create and remember passwords, a passkey generates a public-private key pair, storing the private key inside a Secure Enclave that is isolated from the main processor of the device. This key pair is then used for authentication.
With this structure, users no longer need to manually input passwords. Authentication is seamlessly handled through biometric methods such as PIN, Face ID, or fingerprint, and is inherently tied to the user’s device.
How Passkeys Improve Security
To understand the security of passkeys, we must first examine the problems inherent in traditional password-based systems.
Problems with the traditional user-entered password system:
Users must remember the passwords for all their accounts.
This leads to a Single Point of Failure.
As the number of accounts increases, it becomes more difficult to manage unique passwords for each service.
Consequently, users are more likely to reuse the same password across multiple services.
If one of these services leaks a password, or if the user’s password is exposed even once during the login process, all services sharing that password are put at risk.
Moreover, since the user has to remember every password personally, there's always a risk of completely forgetting a password and permanently losing access to the account.
Passwords are vulnerable to various attack vectors.
Malware that detects keyboard input can be used to steal passwords.
Phishing sites that mimic, for example, the Google login page can trick users into entering their passwords directly.
Once a password is leaked, it gives the attacker immediate access to the account.
Passkeys address these vulnerabilities.
Passkeys are automatically generated and managed at the OS and hardware level, so users don’t need to worry about managing them themselves.
A unique key pair is generated per service, so even if one service is compromised, others remain unaffected — solving the Single Point of Failure problem.
Since passkeys are stored securely and automatically on the user’s device, there's no need for users to remember or manually manage anything.
The private key of a passkey is stored in a hardware-isolated area (Secure Enclave).
Each login request involves a unique authentication, meaning that even if a passkey credential is leaked, it cannot be reused in future logins.
The private key is stored in the Secure Enclave, a hardware-level isolated environment, making external access virtually impossible.
Furthermore, passkeys are bound to specific domains, which prevents them from functioning on phishing sites.
Passkeys are further encrypted using biometric data or a device passcode, minimizing the risk of theft.
In short, passkeys mitigate the problems and vulnerabilities of traditional password-based systems — while offering a better user experience.
Using Passkeys in Blockchain
Traditionally, blockchains have relied on a seed phrase — a set of 12 or 24 words — to authenticate ownership of an account. In other words, possessing the seed phrase means having full control over that account and its assets.
While the underlying cryptographic structure of seed phrases is highly secure, the challenge lies in securely storing the seed phrase itself. This has become the most critical point of vulnerability from a user perspective. The burden of storing and managing the seed phrase has led to a major usability issue — and if the seed phrase is lost or stolen, the user may permanently lose access to their account and all associated assets.
Various methods have been proposed to safely store seed phrases, but most of them inevitably sacrifice usability. Even then, none can be considered perfectly secure.
Against this backdrop, ERC-4337 introduced the concept of programmable accounts, paving the way for passkeys to be used as an authentication method for blockchain accounts.
This enables users to sign messages required for blockchain usage using passkeys — providing an alternative that frees them from the burden of managing seed phrases directly.
Why Passkeys Are Safer Than Traditional Blockchain Security
Passkeys offer the following advantages over traditional seed phrases:
Seed phrases are typically exposed in memory during signing.
This makes them vulnerable to a variety of attack vectors, including malware and browser exploits.In contrast, passkeys never expose the private key — only the signed data is transmitted externally.
The private key in a passkey is stored within a physically isolated secure enclave, making it technically very difficult to extract or compromise.
Access to the passkey is only permitted temporarily during authentication, and requires biometric verification or a PIN.
Passkeys are stored only on the local device by default, and can be securely backed up in an encrypted format using OS/vendor-provided cloud infrastructure.
This ensures recovery is possible even if the device is lost.
Even if the device is stolen or lost, attackers still need to pass biometric authentication, providing an additional layer of security.
Compared to seed phrases — which require the user to come up with their own security practices — passkeys offer a much easier and safer way to secure digital keys directly on a device.
This allows users to achieve both stronger security and better usability.
Are Passkeys Truly Secure and Decentralized?
So then, we must evaluate:
Are passkeys truly more secure than seed phrases, or do they introduce a different set of risks?
Passkeys, being physically isolated within a device, are considered highly secure — but in practice, there are still some potential vulnerabilities.
By design, passkeys are stored in a device’s Secure Enclave, which is physically separated from the main system and intended to prevent any leakage of the private key. In theory, this makes them non-exportable and completely tied to the device.
However, when we look at real-world implementations of passkeys by systems like Google, Apple, and Windows, we find that these platforms do support backup mechanisms. This means that, in some form, the private key — which should never leave the Secure Enclave — is being encrypted and made portable for cloud backup.
In fact, a security experiment conducted by Ledger showed that it is possible to extract a passkey from a jailbroken Google or Apple device. This proves that while passkeys are relatively safe against malware and other attacks, they are not entirely bulletproof.
To mitigate this risk, users can choose to disable backup functionality when creating a passkey. However, this approach introduces another issue:
If the device storing the passkey is lost, stolen, or damaged, the user may permanently lose access, just like with a lost seed phrase.
Another major concern is whether passkeys can truly be considered decentralized.
As previously mentioned, the implementation of passkeys is vendor-dependent — both in terms of hardware and software. A passkey created on one vendor’s platform cannot be used freely on another, as it is locked into that vendor’s ecosystem and must rely on their infrastructure.
In addition to vendor dependency, the domain binding that occurs during passkey creation presents another layer of centralization.
While this design improves security in traditional use cases by avoiding Single Points of Failure, it creates friction in blockchain use cases by binding a passkey to a specific domain.
Because passkeys are domain-bound at the time of creation, only the service or program associated with that domain can access and use that passkey.
This is enforced at the OS level by the vendor, and circumventing it would require low-level reverse engineering — essentially, hacking.
As a result, a passkey created by one wallet cannot be freely used by another wallet. This makes the passkey inherently dependent on the service where it was created, exposing a structural centralization issue.
In conclusion, passkeys are a relatively safe and convenient authentication method —
but they are not an all-encompassing solution against every attack vector.
Given the current implementation, it is important to recognize their structural limitations:
they are inherently tied to specific services and vendors.
Remaining Challenges / Limitations and What Needs Improvement
Based on the issues outlined above, there are two major challenges that need to be addressed when it comes to passkey adoption:
Centralization issues (vendor/domain dependency)
Security vulnerabilities related to backup-enabled passkeys
Realistically, solving these two issues is a difficult task.
Current passkey implementations in the industry are based on domain binding (which exists to prevent other types of security problems) and are fundamentally tied to the infrastructure of platform vendors.
The domain dependency of passkeys could be partially mitigated by defining standards that allow multiple services to share the same domain,
but ultimately, the identity provider and authentication logic remain bound to the vendor (e.g., Apple or Google).
Thus, the dependency on those vendors — and on whatever service identity is tied to the passkey — will likely persist unless there is fundamental reform.
This would require significant technical changes and cooperative efforts among vendors.
At the same time, the fact that passkeys can be backed up introduces a potential attack surface.
While disabling backup when generating a passkey might be the most secure option,
this creates another risk: a Single Point of Failure, where the user loses access if the device is damaged, lost, or stolen.
As a result, the responsibility for securing backup-enabled passkeys ultimately falls on the vendor.
From the user’s perspective, the most practical way to mitigate this risk is to stay informed and continually monitor the vendor’s security posture.
A realistic solution for now: have alternative signing methods in place.
In most cases, the relatively bigger concern is lack of cross-compatibility and the structural centralization passkey introduce rather than cryptographic security of passkeys themselves.
To reduce the risk of lockout or failure, users should always have a recovery plan in place — even if the passkey becomes unusable.
Some viable approaches include:
Social recovery, where trusted parties approve account restoration
Registering multiple passkeys across different devices
Using additional seed phrases or adding a multi-signature recovery mechanism
By setting up multiple passkeys across multiple devices, you can reduce the Single Point of Failure risk.
However, it’s important to note that even these options may introduce new vulnerabilities or degrade the user experience.
Why You Should Still Use Passkeys
Despite all the issues discussed above, passkeys still offer more advantages than many other available options. As long as you understand their limitations and apply them appropriately, passkeys remain a powerful security mechanism.
They are far safer than wallets that use seed phrases in memory for signing.
Memory is one of the most vulnerable parts of any system, and we must not forget that wallet software often needs to load seed phrases or private keys into memory during use.They are more secure than email or SSO logins.
Even when protected with multi-factor authentication (MFA), email or SSO accounts are still vulnerable — especially to session hijacking attacks that target signed tokens.
Fundamentally, these methods rely on centralized service providers, and gaining access to the account equals direct access to your assets.
In contrast, passkeys are stored in encrypted form in the cloud and reside securely on the user's local device.
Although there have been isolated experimental cases (e.g., from jailbroken devices) showing potential extraction, such scenarios are rare and extremely difficult to reproduce.When used with trusted vendors and wallet providers, passkeys can be safer than traditional methods.
While it's difficult to avoid centralization entirely, platforms like Apple or Google are unlikely to suddenly halt support or become inaccessible.
So within a reasonable threat model, passkeys offer relatively stable and secure usability.
That said, the wallet provider that generates and manages your passkey is the most critical factor — extreme care is needed when choosing one.
Also, the centralization issue primarily affects compatibility and interoperability — not direct access to the account.
Neither vendors nor wallet services can actually access your passkey’s private key or account balance.You can maintain a strong user experience.
Many security options require users to sacrifice convenience — but passkeys offer both high security and seamless UX.
They are one of the rare solutions that achieve a balance between security and usability in real-world applications.
Conclusion
Passkeys are a robust security mechanism that also enhance the user experience by enabling biometric-based signing methods. However, their current implementation comes with structural limitations — namely, centralized dependency on domains and vendor-specific hardware/software environments.
Anyone using passkeys as a signing method should clearly understand these centralization constraints and be aware of the possible risks involved (such as being unable to transfer account ownership). It’s important to choose a service provider that offers proper countermeasures and recovery paths.
Wallets and blockchain systems must continue to explore secure approaches that preserve user experience, while striving toward full decentralization.
We need to keep looking for ways to strengthen security without forcing users to sacrifice usability.
Ultimately, no solution is perfectly bulletproof.
What matters most is the ability to adapt swiftly to an evolving threat landscape — and to improve continuously over time.
Magic Beanz fully recognizes these challenges and is committed to ongoing research to strike the right balance between security and usability in Web3.
We are dedicated to minimizing user anxiety and friction by delivering best-in-class security technology and the latest advancements in authentication — without compromising on simplicity or convenience.