Why We Won’t Be Offering a Multi-sig Support Product
Bitcoin Support by Bull Bitcoin offers self-custody support packages for mobile, desktop, and hardware wallets which include support sessions, a bitcoin voucher, free educational guides, and access to the necessary software or hardware. We help people install, secure, and manage bitcoin wallets with one-on-one phone support.
We have three wallet recommendations, one for each type. For mobile, we recommend Blue Wallet for the reasons listed here. For Desktop, we recommend Wasabi Wallet, click here to learn why. Finally, our hardware wallet of choice is the Coldcard Mk3 by Coinkite, here’s why. We’re only recommending single-signature setups for Bitcoin Support users that want to self-custody their coins securely and effectively.
Why are we not recommending multi-signature for single users self-custodying when so many other companies and experts do? We explain below why.
We want to emphasize that we still consider multi-signature useful for group or collaborative settings, and for individuals with advanced technical abilities, specifically when it comes to using bitcoin. This article will be about its usage for individuals seeking support in securing and managing their bitcoin.
Our Experience with Multi-Signature Setups
Multi-signature is a protocol that is part of the Bitcoin Network which allows users to create script conditions that require signatures from multiple private keys in order to spend a UTXO (unspent transaction output aka ‘bitcoin’), click here to read more on how it works.
For every multi-signature scheme you create, you have to select how many signatures are part of this scheme (n) and also the quorum (m) needed in order to spend the funds. You can select at a maximum 15 signatures for (n) and as low as 1 for (m).
After more than 2 years and hundreds of customers served at Veriphi (recently acquired by Bull Bitcoin), my colleagues and I have witnessed the self-custody experience of many Bitcoiners. We’ve noticed that multi-signature schemes add too much complexity for the benefits they provide for single user setups.
Our initial thesis at Veriphi was that multi-signature was the way to go given it was becoming the self-custody/collaborative custody industry gold standard because of the benefits it provides. We were, as many are, underestimating three major threats that each user faces :
- Fatigue during the setup process;
- Forgetting details about the setup that leads to loss;
- Locking yourself out of a multi-signature scheme due to not having access to all required keys.
Obviously, multi-signature setups are extremely secure and hard to compete against when it comes to physical threats, such as violent theft, but it’s important to remember that threat models shouldn’t be built only on gravity but also on probable risk. Loss remains a much bigger threat than theft.
Multi-signature benefits can be found in single-signature setups
The most important benefits from a multi-signature scheme are eliminating single points of failures, providing backup redundancy and limiting access to your coins to defend against physical threats.
First, eliminating single points of failure means that if one key is lost or compromised (theft), you don’t lose access to your coins. In a multi-signature scheme, you’re protected because multiple keys are required to move your funds. However, using a passphrase on a single-signature wallet will also provide that additional security benefit by eliminating the single point of failure risk tied to just having a seed phrase and can also provide the same geographical distribution benefits that multi-sig wallets provide.
Backup redundancy is offered by a multi-signature scheme when your ‘m’ variable is lower than your ’n’ variable. That means that if you lose a key, you still can access your coins. On the single-signature front, you can do multiple backups of your seed phrase and of your passphrase to mitigate the risk of loss.
Finally, the least plausible risk scenario is an attacker putting you under duress and forcing you through violence to give access to your coins. In a multi-signature scenario, you’re obviously protected against this attack since your keys should be geographically distributed, thus you can’t access your coins (though as we’ve noted above, this can also be accomplished with single-sig via passphrase) You can also further mitigate against this risk by using the advanced Coldcard MK3 features, such as a login countdown (which delays the access to the device by a maximum of 28 days), a decoy wallet (which gives access to a different stash of coins) or a brick me PIN (which destroys the device).
However, the last scenario is a rare one and the features offered by the Coldcard should not be handled by beginners, so we don’t make it part of our basic setup, only The Remnant Package (coming soon) will include support for those features.
It’s also important to keep in mind that setups that include geographical distribution are exposed to physical risks such as border closures or similar COVID restrictions we’ve seen over the last years. It’s important for self-custody to adapt to our new reality. There’s also many individuals that are moving lately (particularly Bitcoiners) and they want to move with their coins. A multi-signature setup complicates this significantly.
Multi-signature is for collaborative settings
For all the reasons listed above, we don’t recommend multi-signature setups to single, fully sovereign individuals. However, there’s obviously a place for multi-signature in group settings such as organizations or families, and for collaborative settings, or for those with secure access to multiple locations and advanced technical abilities.
Collaborative services like Unchained Capital are great for reducing the friction and complexity of multi-signature wallets and solve the problems of fatigue, potential loss, and getting locked out of your wallet. For users that accept the privacy and sovereignty tradeoffs involved with a collaborative setting, we recommend they use Unchained Capital since it’s a business with great reputation and high standards.