Hey Eric, thanks for your reply. The scheme will work as a restfull service (i use tastypie) and is designed specifically to work for a bitcoin cloud backup service. The reason we want to implement such a scheme is so if the password is compromised, an attacker cant download the encrypted data stored on the server. Basically its a privacy driven solution not a security one because the data stored on the server (which can be downloaded once the user is logged in) is encrypted.
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