![]() Why is that? Even though a multisignature setup, for example a 2-of-3 multisig wallet, sounds like it could be recovered with two keys, it cannot. Backup of multisig setupsĮach participant in a multisignature setup must not only secure their private keys or seed, but also additional metadata like the extended public keys (xpub) of all co-signers, the used threshold, derivation path and script type. Without that knowledge, it’s hard to independently verify receiving addresses or outgoing transactions. In combination with hardware wallets, multisig wallets are especially hard to use securely, as most hardware wallets are stateless and don’t remember the other co-signers. But due to more moving parts, such setups are complex and contain pitfalls not immediately obvious. What are potential pitfalls?Ĭreating a multisignature wallet sounds like an easy enough solution, and is often advised. because an employee left the company, or a key has been compromised) a new wallet needs to be created, to which all funds are then transferred. Unfortunately, keys cannot simply be rotated, so with each change in signing keys (e.g. one stolen key is not enough) and data loss (funds are still recoverable with a lost key). Added resilience: Multiple keys stored in different locations make the wallet more resilient against theft (e.g.Added security: one person controls all keys, but these are created on different computers or hardware wallets, avoiding a single point-of-failure.Distribute responsibility: different people are controlling one key each, and every transaction needs to be signed by a predefined number of keys.Multisignature wallets have various applications: The wallet is then typically referred to as a M-of-N multisig wallet, for example a “2-of-3 multisig wallet” where 2 keys out of a total of 3 need to sign each transaction. The number of keys that need to sign a transaction (M), and the total number of keys (N) are defined when creating the wallet. The shared control is achieved by using more than one private key. What is a multisignature wallet?Ī multisignature Bitcoin wallet can be viewed as a shared account that needs multiple authorizations to spend money. The BitBox02, however, keeps your private keys safe at all times. ![]() We don’t have control over the development and distribution of the software and can’t provide any guarantees. Note: Electrum wallet is a third-party application. It can be used as a pure software wallet, with the private keys stored on your computer, but it also works very well with most hardware wallets. It connects to an Electrum server of your choice and offers many advanced features. The free open-source Electrum wallet is a powerful Bitcoin light client for Windows, Mac and Linux. Part 3: BitBox02 multisignature wallet Electrum Part 1: Use BitBox02 with Electrum wallet We wrote this post for advanced users, so we’ll go a bit more into details. The integrity of the whole multisig setup, including all co-signers, will be secured by the BitBox02 hardware wallet. Learn how to use the best-in-class BitBox02 multisignature for Electrum multisig wallets.
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