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Almost Ultimate Password Management Guide for a Safe Digital Life

Photo by Dan Nelson on Unsplash

In a nutshell, you will find here an advanced password management guide for those who want to reach the next level in terms of digital life security.

This article is also available on my blog.

Part 1

The difficult question of our digital life security has only become more complex over the years, due to our increasingly massive use of all kinds of digital content. As the financial stakes behind our data can sometimes be colossal, it is normal that from the beginning they have aroused the greed of all kinds of unscrupulous people. And it goes without saying that, even if all kinds of mechanisms have been put in place to better protect our data, the techniques to steal it have never stopped growing in ingenuity.

There are already many guides out there discussing what differentiates a good password from a bad one, why it is needed to enable two-factor authentication when possible, or even how to use a password manager. All these tips should satisfy the vast majority of users, who generally only want to access their messaging service or their favourite social network without too many constraints. Compromising of those different accounts may not seem very serious as it usually boils down to a few annoyances to fully recover them. Even the hack of a banking account like one on PayPal may seem to have a limited impact as the organization offering the service watch your back and can block or refund the illegitimate fund transfer.

For all of these users, I’ll just advise sticking to the basic rules of thumb:

  • to use a password manager aimed at storing a strong and unique password for each account;
  • to activate two-factor authentication;
  • to have an up-to-date antivirus;
  • to beware of phishing techniques and other various scams.

But if you keep reading, maybe are you part of a minority of people who see the shortcomings inherent to this minimalist approach. Perhaps you feel the need to protect data for which “pretty much secure” is not enough, or perhaps you have to cope with constraints that go beyond standard use cases.

To fix a concrete case that everyone will understand in 2021, let’s imagine that you are the cryptocurrency millionaire that I could have been if I had been a little more visionary. This technology is based on the usage of a public and private key pair, the latter being essential to spend your money. Here, there won’t be a PayPal that will come to your rescue if you lose your private key or if someone steals it and pluck all your money out of your account. Here, you are alone.

Of course, in this very case, you will not have missed investing in an electronic wallet to prevent your private keys lying around on a potentially corrupted PC. But the problem is far from being solved: this wallet can be destroyed or lost by accident and you will therefore need to set up a mechanism to save your recovery phrase. The recommended method is then to engrave it in a metal plate and put it in a safe (ink and paper are very fragile and deteriorate over time). This procedure is safe, but not very convenient. Also, if some people follow this path to protect their cryptocurrencies, I doubt that they will follow it to preserve other digital data as well. I’m also pretty sure that many will simplify some security steps to make their lives easier, thereby increasing their vulnerability. Then, finally, do you really want your assets to disappear with you if you happen to die unexpectedly ? Wouldn’t you like your spouse or children to be able to benefit from your crypto-currencies ? Because the problem is that it will definitely not happen if you have not provided a dedicated mechanism or instructions to do so.

This is just one example among others, but it has the merit of being an obvious one. Crypto assets are indeed good representatives of data that we want to protect particularly well without making it completely inaccessible. Cybersecurity is thus a difficult question to resolve and it certainly requires devoting a little time to think about it peacefully, to deal with your own constraints and objectives. For my part, it took me a big day of thinking after having watched a very good video by Charles Hoskinson that I would like to thank here. It sparked my interest, but above all it gave me a lot of tips and tricks that I will use again here.

The Disponibility, Integrity and Confidentiality Triad

A good IT security solution must inevitably be based on the three pillars of availability, integrity and confidentiality. Without going into too many details that others will explain better than me, these concepts can be applied as follows for the management of our passwords:

  • Disponibility: information must be accessible to whom it may concern when it is needed. The whole problem then comes down to making our passwords available while ensuring their integrity and confidentiality. For example, if you write this information down on Post-its pasted under your keyboard, the information is very available, but also strongly jeopardizes the other two criteria.
  • Integrity: this criterion assures that the data to be protected is not altered or destroyed whether voluntarily or involuntarily. In our case, this amounts to ensuring that the passwords are stored in a secure place with adequate backup copies.
  • Confidentiality: passwords should only be accessible by the person who uses them, i.e. you. Increasing the measures ensuring this criterion can considerably deteriorate that of availability. For example, if the information is recorded in ledgers stored at the bottom of a safe in your bank, its use will be very confidential, but also severely limited.

As we can see, improving each of these criteria in isolation can have a negative impact on the others. It is therefore necessary to find a compromise depending on the requirements and constraints of the system to be protected. There is no perfect solution, every situation is unique.

Anyway, you will notice that I have tried to cover as many cases as possible when you discover my little roadmap below. So even if it might not be 100% applicable to your needs, chances are it could be as a very good starting point.


The requirements relating to password management that I wanted to put in place are quite numerous and are not trivial to satisfy all at the same time.

  1. No sensitive data can be stolen without compromising, at a minimum, two layers of security. By security layers, I mean any mechanism that stands as an obstacle between a hacker and the data to be protected. This can consist of a firewall, email account, access to your personal computer, access to your phone, password, two-factor authentication, etc. Of course, not all of these layers offer the same level of protection and each sensitive piece of data should be considered separately to determine if an additional level of security is not required.
  2. The password manager itself is considered as a layer of security that can be broken. We will come back to the use of such software later. It is meant to facilitate management of confidential data by keeping them safe in one place, in a sort of encrypted digital safe. Due to the underlying cryptography that is used, this kind of solution offers almost foolproof protection when the safe remains locked. However, the problem stems from the fact that in order to be used, this safe will have to be open from time to time, potentially exposing all of its contents to a rogue spy lurking in the shadows. And although various mechanisms are often put in place to guard against malware that would try to steal information once the database is unlocked, it is absolutely impossible to guarantee that only you will get access to those data.
  3. Any device, whether it is a phone, a PC, a USB key or other, can be lost without consequence. They can also be all lost or destroyed simultaneously without it being impossible to recover all your data and accesses. So even imagining the grim scenario in which your whole house would go up in flames, taking all of your electronic equipment with it as well as your pseudo-fireproof safe, you must be able to recuperate everything. This criterion is essential knowing that any instrument supporting you in the implementation of your security policy can be easily lost, stolen or destroyed.
  4. The solution must be as flexible as possible and must allow daily access to the various passwords from a working computer. The problem then arises from the fact that a computer exposed to the Internet daily is very likely to be corrupted in one way or another, even by adopting a careful behaviour. It is therefore not impossible that a keylogger records everything you enter from the keyboard or that a hacker can see what is displayed on your screen. From having personally played with Back Orifice at the time, I can assure you that it is not science fiction at all. Despite everything, unlocking your password manager exclusively on a PC disconnected from the Internet is certainly prudent, but also terribly disabling. So we won’t do that most of the time.
  5. Lastly, the policy put in place must provide room allowing you to pass on your password database to a relative if the worst should happen.

Shopping list

The most important rule to consider when building a security policy is to realize that no solution is infallible, but that the more you have to break protections to penetrate a system, the more the difficulty exponentially increases. Compartmentalization is therefore compulsory in order to prevent a breach from spreading and nothing and nobody should be trusted. The expression “belt and braces” is the norm here.

The ingredients that we are going to use are fairly standard, but it is above all in the right way to combine them that the effectiveness of a solution lies. So let’s start by listing the different elements we are going to need:

  1. A password manager to bring all sensitive data together in a single digital container. The use of such solution goes, of course, completely against the principle of compartmentalization that we have just mentioned. And knowing that we consider this piece of software as not entirely safe, additional layers of security will be necessary to avoid literally putting all our eggs in one basket. Such a tool, however, greatly facilitates our requirements 3 and 5. Indeed, It allows us to focus our attention on a single thing, as well as to make creation of backup or synchronization in the cloud easy. Leaving passwords lying around is the best way to lose them or to end up with uneven protection. A manager also offers the advantage of being able to memorize all kinds of long and complicated passwords, as well as offering tools to scramble keyloggers.
  2. Unique passwords for each account to be protected. This principle prevents that if a password were to be compromised, all your other passwords are also compromised. Remember, when you protect any online account with a password, you have no idea how it will be handled by the service provider. Normally a password should never be stored unencrypted on a server, but it is still very common that this is not the case and that hackers take in their loot databases of thousands of passwords. The first thing they’ll try next is to reuse them with as many other online accounts as they can.
  3. Strong passwords to guard against all kinds of dictionary or brute force attacks. A password based on a variation of any existing word is trivial to crack nowadays with appropriate software. But even completely random passwords are at risk if they are too short. Indeed, brute force attacks that amount to testing all possibilities as quickly as possible become more and more realistic. The disproportionate power of certain graphics cards can even be used to achieve dizzying test rates per second. As explained here, the RTX 3090 allows for example to test more than 3 billion passwords per second on an encrypted ZIP file. A quick calculation then makes it possible to realize that a short day is sufficient to bypass any password of 7 characters or less. The use of managers allowing the memorization of long random passwords is therefore one of the best weapons we have at our disposal.
  4. A Yubikey. This one offers the possibility of transferring part of your access control security on a hardware device much more reliable than can be your computer or your smartphone. The first usage we will make of it is to split the passwords into two parts, one of which will be stored in the key. This makes it possible to create very strong passwords that you will not even have complete knowledge of. Accessing one of your accounts will then require two elements: one that you memorize or that will be stored in the password manager, and a second that you bring through this key. In addition, the Yubikey implement all kinds of very secure cryptographic protocols enabling best in class two-factor authentication. Those devices also have the advantage of being very easy to use and are accepted by more and more service providers.
  5. A USB key running a Tails session. Tails is an operating system based on Linux, but which is built in such a way as to make all your activities anonymous and to leave no traces after your passage. Its great strength lies in its mode of operation that is carried out entirely in the host computer RAM, without any file ever being modified on its physical medium. Therefore, even assuming that you have collected various cookies, viruses or other unscrupulous cookies during a session, all of this will be purely gone the next time you use it. Tails indeed always starts from a completely virgin system and offers the near certainty of operating on a totally secure computer. Technically, all that is required is to download the image of Tails and to flash it on a dedicated USB key. Then, any computer can boot on it. Although not inherently difficult, launching a Tails session may seem restrictive for an everyday usage. Also, as stated in requirement 4, we will only use it for some very special and infrequent operations.

Choice of a Password Manager

There are many password managers with varying features and prices and to make a choice may then seem difficult. The level of security they offer isn’t really a distinguishing factor, as all of them employ more or less the same kinds of techniques to encrypt and protect your data.

Most of them revolve around a cloud service that will be either very limited or paid (delete as appropriate), a pleasant user interface and all kinds of features to make their use very easy and almost transparent. Because of their simplicity, they are also the kinds of managers I would recommend to anyone not reading this article or who has given up along the way.

But if the data you manage are very sensitive or very valuable, do you really think it’s a good idea to place them in the hands of someone else who will have no accountability if something goes wrong ? While it’s unlikely if they do their job well, it is still possible that your data will disappear in the fire of the data centre that housed it (yes it happens). All you will get then is a vague apology for the inconvenience — and you will only be charged $5 a month :-).

Personally, I prefer the completely free option, but a little more technical, that the manager KeePass represents. The latter is very solid cryptographically speaking, entirely free, audited, and will give you the joy of tasting a graphical user interface back from the 90s. Clearly, it is not what one could qualify as user-friendly and it will certainly not take you by the hand to simplify your daily life. However, it is extremely powerful and you will remain the sole depositary of your data; which to me is all that matters.

Setting up a Solution

Now that we have everything we need, it time for us to start cooking the dish I promised you. To do this, let’s first look at the recipe that you will find in the image below.

The main ingredient occupying the entire central part of the drawing is obviously the password manager in which you will write down absolutely all the information you want to protect. The only thing that you will not be able to enter is, of course, the Master Key that is needed to unlock it, and its elaboration requires a little care.

Master Key Derivation

There are, of course, several ways to do this, but here is the one I use in order to have a password that is both very strong and very easy to recover. The idea is to start with any Root Code that is easy to remember. In fact, this will be almost the only information you will need to memorize. This code doesn’t have to be very complex, because we’re not going to employ it as is, the idea is rather to modify it through a secret derivation mechanism which will make it much more convoluted.

Also, you can see on the drawing at the top left that the Root Code is transformed to generate a Salt which will itself be saved in the Yubikey for convenience. This derivation procedure is a kind of secret to remember and may consist of various logical or cryptographic operations readily available online. Here is a non-exhaustive list of functions that can be used:

  • Hash functions such as MD5, SHA or Keccak;
  • Encoding change to or from hexadecimal, Base64, etc.;
  • Various and varied permutations, shifts or rotations;

And of course, you can nest these functions together to create a complex secret derivation of your own. To fix the ideas, suppose that we choose 12345 as the Root Code, which is to say one of the least secure passwords we can imagine. Now let’s select the following derivation function (obviously, don’t choose the same one!):


Which means that we encode the string 12345 in Base64, that we read the result backwards, then that we take the SHA1 hash of the outcome. It may seem like it’s complicated, but it isn’t that much and it can be done in minutes with good online tools. It is also very easy to get the same result from the command line in Linux:

echo -n $(echo -n $rc | base64 | rev) | sha1sum

Then we get:

SALT = c25061cd9ec4fe948926caeb0d75ec1b5c3dace8 which is immediately something much more difficult to guess.

It goes without saying that you will neither be able to remember such a string of characters on your own, nor even to encode it easily. This is why we can use one of the very practical functionalities of the Yubikey and which consists in programming it to play back this sequence when you press and hold its central button, as if you had typed it yourself on the keyboard.

The master password is made up of the concatenation of this salt with the root code. This way, you make sure you have a password that cannot be brute force broken and no one could do anything with your Yubikey since one would only have half the information he needs to open your password manager.

Finally, and this is very important, you risk absolutely nothing if you lose your Yubikey, since you know the process to recover the embedded information. If you are afraid of forgetting it, have the formula engraved on a metal plate and put it in the safe. It will still be valid if you later decide to change the root code to something a little more subtle than 12345.

Password Management Methodology

Each of the information that you will store in your manager is unique in terms of value, frequency of use or associated level of security. Therefore, they do not all have to be treated in the same way and I will try here to outline the method I have chosen to apply. I will, of course, leave it to you to adapt it to your own convenience.

The pwd/code/sensitive information block of the drawing represents some password to be protected in the manager and the first step consists in filtering it according to these 3 main categories.

  1. First, there are passwords that protect online accounts. These are accesses, such as your e-mail account, which are extremely exposed since the whole world has the opportunity to try to force the entry. They are processed by the <Public Gateway?> block in my flowchart and require special attention, because, if someone were to steal one of them, they could a priori directly access the associated resource.
  2. Then there are passwords that are linked to some hardware device, such as your bike lock, your SIM card PIN, your phone or PC password, etc. These are in principle less vulnerable, because a hacker could do absolutely nothing with them unless they also get physical access to the associated resource. These are handled by the <Bound to device object?> block in the flowchart.
  3. Finally, there is the information that does not belong to the previous categories and that has an intrinsic value in self, such as the recovery phrase of your crypto wallet. These are particularly critical and require a more thorough approach, because, remember, it’s not impossible for someone to steal the data in your manager when you open it. An additional layer of protection is therefore essential and this point will be dealt with later.

Handling Two-Factor Authentication

If it is an online account, then the next question to ask yourself is whether it has a two-factor authentication mechanism that you will certainly have activated, shown by the block <Dbl Auth?>. An affirmative answer immediately adds a level of protection, because the associated password is of no great use alone. However, be careful that several two-factor authentication methods exist and that they are not equal in terms of security.

First of all, avoid like the plague the famous and ridiculous secret question, whose only level of defence relies on a banality such as the colour of your eyes. If you are forced to enter something like this (unfortunately it still happens), either type in random garbage or consider it a second password that you will also add to your manager — perfectly, the colour of my eyes is sldk3g1hj4uhzeufi.

One-time codes sent by SMS are also to be avoided, because it turns out that this communication channel can be quite easily exploited to divert the transmitted messages. It’s best to use unique codes generated by an authenticator app like Google Authenticator, although this latter isn’t foolproof either. Indeed there are malware which would have the capacity to extract the secret seed of this kind of application if they managed to penetrate your phone. You must also be careful to save this seed in the password manager in order to be able to restore this access in the event you loose your device; we’ll talk about that right away.

If the website allows it, the best two-factor authentication method is actually a hardware security key like the Yubikey. It incorporates many protocols to generate one-time passwords that it is not possible for an attacker to steal. The only problem with the Yubikey is that you can lose it, and there are two solutions to handle this situation. The first, which is the one generally recommended, is to have 2 Yubikey both associated with your accounts. One of them must be stored in a safe place and only be used if the first one is lost, just for the time of buying a new one. The disadvantage of this technique is that it does not fit my requirement number 3 which states that all electronic material can be lost simultaneously.

Personally, I prefer to activate two two-factor authentication methods if possible: a first with an application such as the Google Authenticator and which will only be employed in case of emergency, and a second with a Yubikey which will be used daily. The loss of the latter is therefore no longer a problem, because the phone application can replace it if necessary. Additionally, if you are really worried that malware could slip into your phone and steal the seed from the two-factor authentication app, you can simply remove that access from your device. As this seed must be saved in the password manager anyway, you can always restore it later if needed.

Now we have to explain how to go about saving the seed of the two-factor authentication application. To do this, let’s start by looking at how the binding works on your phone, with the image below. In all cases, you will be invited to open the application and to scan the QR code that appears on the screen. This one actually contains a randomly generated secret seed that will be shared between your device and the online account. This is this very seed that must be saved in the password manager in order to be able to re-establish this link in the event of loss of the smartphone.

There are two schools of thought, as some web sites will immediately show you the seed in text form (on the right), while others will keep this information hidden (on the left). In the latter case, it is always possible to force it being displayed by clicking on the link enter code manually. Another option is also to take a photo of the QR code and to save it in the manager as an attached file. In any case, this code will no longer be available once you have scanned it, so you must not omit to save it at this stage. If you forget or make a mistake, don’t panic: you can always remove a two-factor authentication method and restart this process.

Choosing a Password

Choosing a password is not to be taken lightly, but the constraints involved really depend on the use case. This is why I distinguish 4 cases in my flowchart, represented by the 4 green rectangles.

Let’s start with the two on the left, which correspond to online accesses for which no two-factor authentication is available (<Dbl Auth?=No>), but which would, however, be sensitive in terms of negative consequences if it were to be compromised (<Sensitive?=Yes>). This is certainly not the most common case, as two-factor authentication is normally available to handle these kinds of accounts. Nevertheless, I am dealing with it for the sake of completeness, but also to present again the method based on the salt, as this one is always interesting to use.

As we have the Yubikey to memorize for us a complex sequence and which is already used to unlock the password manager, we might as well reuse it in order to proceed in the same way here. The password will therefore consist of two pieces, one generated by the key, the other which will be stored in the manager. For example, if you choose 12345 again, you can store {SALT}12345 in the application to make it crystal clear to you. But even in the event that your manager is compromised, the real password will not be revealed.

If two-factor authentication exists, then we can join the path coming from passwords linked to some hardware resource. These two cases indeed present an additional level of security and we can possibly proceed without the salt technique seen previously. But whether it is with or without the salt, I still distinguish two possible cases in the flowchart, through the <Daily use?> block.

If a password is not often used, then it is fine to generate it randomly using the password manager and let the latter remember it. When you need it, you just have to take it from the manager and this is what I call complex pwd in the diagram. But for all kinds of reasons, it can be restrictive to have to open the manager every time you want to access a frequent application, or if there is no way to copy paste a sequence of 40 random characters.

So it is sometimes wise to relax a little our constraints which are in any case already of a good level. This is what I call simple pwd in the diagram. Be careful that I don’t mean that such password should be easy to guess, but rather that it should be easy to remember, while being unique and having a complex appearance. Then, you can use it everywhere without difficulty and without too much risk. I will not discuss here the different techniques to elaborate this kind of good password, because I realize that this guide is already very long and that I still have a lot to say. So I’ll just point to other articles, like this one, or even this other one.


In the next part of this article, I will explain how to add an extra level of security inside the password manager container and how to deal with critical data. In addition, I will also talk about backups and how to bequeath your data if you feel the need for it.



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