Keys & Cryptography

Understanding Nostr's cryptographic foundations is essential for secure financial applications. This guide covers key management, security practices, and cryptographic operations.

Key Fundamentals

Keypair Structure

Nostr uses secp256k1 elliptic curve cryptography:

Key Formats

Format	Prefix	Use
Hex	none	Internal processing
npub	npub1	Human-readable public key
nsec	nsec1	Human-readable private key
nprofile	nprofile1	Pubkey + relay hints

Example Keys

Private (nsec): nsec1vl029mgpspedva04g90vltkh6fvh240zqtv9k0t9af8935ke9laqsnlfe5

Public (npub):  npub10elfcs4fr0l0uf...

Hex pubkey:     7e7e9c42a91bfef19fa929e5d...

Key Generation

Secure Generation

import { generatePrivateKey, getPublicKey } from 'nostr-tools';

// Generate cryptographically secure random key
const privateKey = generatePrivateKey();
const publicKey = getPublicKey(privateKey);

From Seed Phrase (BIP-39)

import { mnemonicToSeedSync } from 'bip39';
import { HDKey } from '@scure/bip32';

const mnemonic = "abandon abandon abandon...";
const seed = mnemonicToSeedSync(mnemonic);
const hdkey = HDKey.fromMasterSeed(seed);

// Nostr derivation path: m/44'/1237'/0'/0/0
const nostrKey = hdkey.derive("m/44'/1237'/0'/0/0");
const privateKey = nostrKey.privateKey;

Key Security

Storage Best Practices

DO:
✓ Store offline (paper, metal)
✓ Use hardware wallet when possible
✓ Encrypt digital backups
✓ Use multiple secure locations
✓ Test recovery process

DON'T:
✗ Store in plain text files
✗ Email or message keys
✗ Screenshot keys
✗ Store only in one place
✗ Use weak passwords for encryption

Key Hierarchy for Finance

Signing Operations

Event Signing

import { getEventHash, signEvent } from 'nostr-tools';

const event = {
  kind: 1,
  pubkey: publicKey,
  created_at: Math.floor(Date.now() / 1000),
  tags: [],
  content: "Hello Nostr!"
};

event.id = getEventHash(event);
event.sig = signEvent(event, privateKey);

Signature Verification

import { verifySignature } from 'nostr-tools';

const isValid = verifySignature(event);
// true if signature matches pubkey and content

Financial Transaction Signing

For payments and transfers:

// Zap request signing
const zapRequest = {
  kind: 9734,
  pubkey: myPubkey,
  content: "",
  tags: [
    ["p", recipientPubkey],
    ["amount", "1000000"],
    ["relays", "wss://relay.damus.io"]
  ],
  created_at: Math.floor(Date.now() / 1000)
};

zapRequest.id = getEventHash(zapRequest);
zapRequest.sig = signEvent(zapRequest, privateKey);

NIP-07: Browser Extension Signing

Delegate signing to browser extensions:

// Check for NIP-07 support
if (window.nostr) {
  // Get public key (no private key exposed)
  const pubkey = await window.nostr.getPublicKey();

  // Sign event (extension handles private key)
  const signedEvent = await window.nostr.signEvent(event);

  // Encrypt (NIP-04)
  const encrypted = await window.nostr.nip04.encrypt(
    recipientPubkey,
    "secret message"
  );
}

Benefits:

• Private key never exposed to web pages
• User approves each signing request
• Works across multiple sites

Hardware Wallet Support

Ledger Integration

Projects working on Nostr hardware wallet support:

Ledger App (in development)

• Key derivation
• Event signing
• NIP-07 bridge

Security Model

Key Rotation

When to Rotate

• Key compromise suspected
• Regular security practice
• Transitioning to better security

Rotation Process

1. Generate new keypair
2. Announce transition (signed by old key)
3. Update profiles with new key
4. Migrate followers (they need to re-follow)
5. Move assets to new key addresses

{
  "kind": 1,
  "pubkey": "old_pubkey",
  "content": "I'm rotating to new key: npub1new...",
  "tags": [["p", "new_pubkey"]]
}

Multi-Signature

Conceptual (Not Standard Yet)

For high-value operations:

Transaction requires (2-of-3 multisig):

• Key A signature ✓
• Key B signature ✓
• Key C signature (optional)

Current Workarounds

• Multiple single-key approvals
• Threshold signature schemes
• Social recovery patterns

Encryption

NIP-04: Encrypted DMs

import { nip04 } from 'nostr-tools';

// Encrypt
const ciphertext = await nip04.encrypt(
  privateKey,
  recipientPubkey,
  "secret message"
);

// Decrypt
const plaintext = await nip04.decrypt(
  privateKey,
  senderPubkey,
  ciphertext
);

NIP-44: Improved Encryption

Newer, more secure encryption:

• Better padding
• Versioned format
• Future-proof design

Recovery

Seed Phrase Backup

Your 12/24 word seed phrase:

Word #	Example
1	abandon
2	ability
...	...
12	zone

Store securely! This recovers everything.

Social Recovery

Trusted contacts can help recover:

1. Split key into shares
2. Distribute to trusted contacts
3. Reconstruct with threshold of shares

See Also

• DID:Nostr
• Identity Verification
• Wallets Overview

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Protect Your Keys

Your private key controls your identity AND any connected financial accounts. Treat it with the same care as your bank credentials—more, since there's no "forgot password" option.