Interesting thoughts on a psychological security vulnerability associated with trying to protect all your passwords with one password… there’s a huge dis-incentive to change the “master” password in case you forget it!
I’m not a huge fan of the “password manager” concept in general.
a) Right, let’s store all the important critical data in one convenient place! That way the adversary only has to compromise one password, break one encryption algorithm, or keylog / evil-maid one machine. What could /possibly/ go wrong?
b) Hey, I’ve got an idea. Why not make an encryption algorithm you don’t understand a mental prosthesis you come to rely on, trust, and use every day… to the point that a failure would have highly inconvenient or catastrophic effects on your productivity and security?
c) You know what would be really smart? Locking away all your passwords in one place, so it only takes one mistake on your part to compromise all of them at once!
Eschatology: Physical gold buying has reached a fever pitch over there. (http://www.reuters.com/article/2013/04/23/us-usmint-gold-suspension-idUSBRE93M1HE20130423)
“As I think more about the way people are likely to use a password manager, I think there’s real problems with the way master passwords are set up. As I write this, I’m deeply aware that I’m risking going into a space of “it’s logical that” without proper evidence.
Let’s start from the way most people will likely come to a password manager. They’ll be in an exploratory mood, and while they may select a good password, they may also select a simple one that’s easy to remember. That password, initially, will not be protecting very much, and so people may be tempted to pick one that’s ‘appropriate’ for what’s being protected.
Over time, the danger is that they will not think to update that password and improve it, but their trust in the password manager will increase. As their trust increases, the number of passwords that they’re protecting with a weak master password may also increase.
Now we get to changing the master password. Assuming that people can find it, how often will someone wake up and say “hey, I should change my master password?” Changing a master password is also scary. Now that I’ve accumulated hundreds of passwords, what happens if I forget my new password?”