Stop pushing HWW and complex multisig setup to normies \ stacker news ~bitcoin

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Stop pushing HWW and complex multisig setup to normies

1160 sats \ 52 comments \ @takaponka 31 Mar 2023 bitcoin

Lots of people always pushing HWW to newcomers, to people who just enter the space. They come and see that they need to BUY a product or they will do it bad, I feel that's what they understand when they first come. So they will "waste" 150 dollars on a product. There are not enough pertinent and simple guides to make a cold wallet like that :

Launch Tails on garbage PC with network cards removed
Create new wallet on Electrum and write down 12 words on paper
Scan XPUB with Sentinel wallet
DON'T TALK ABOUT IT except via a nym (best protection is not being a target)
And VOILA

Or there are some but not much discussions about it.

And let's not talk about people asking me about their 2/3 4/7 I don't know what complex Multisig setup to secure their 500 dollars worth of sats ... There are no bad intentions, users often think that complex solution is always the best suited for their needs. So I despite more and more the communication of HWW that want to persuade every newcomers that HWW is only good viable solution.

Have a nice week end stackers !

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1331 sats \ 14 replies \ @TheL0wner 31 Mar 2023

I agree on the multisig part, that is completely unnecessary for most people. HWW and cold storage however are an absolute must where savings are concerned and can easily be obtained for under $100. hot wallets and software wallets are good for pocket money that you expect to spend soon.

your average computer user can't even figure out ad blockers, let alone setting up an airgapped pc as a wallet.

123 sats \ 8 replies \ @frostdragon 31 Mar 2023

I agree that HWW/cold storage is a must, but single-sig is not a great hodl solution. Single-sig = single point(s) of failure, and the chances of that failing long term too high. So many people are going to lose their bitcoin due to bad wallet storage methods and simple mistakes. Collaborative custody multisig sounds more complex than it actually is - it's by far the simplest / most foolproof method. It takes intentionality and familiarization, but we need to work to make that the new norm.

0 sats \ 7 replies \ @TheL0wner 31 Mar 2023

i see collab multi sig as a great option for wallets that multiple people use. For my personal savings, I don't want anyone else involved. Perhaps multi sig would be good there too but that would just be more hoops than needed. single sig should be fine as long you actually keep your keys / seed secure.

15 sats \ 6 replies \ @frostdragon 31 Mar 2023

So here's how I see it (not saying this to be argumentative, just hoping to be helpful, and to each their own):

If you really want to be secure with single sig, you need:

HWW
Passphrase for the HWW (which is essentially just an extra seed word)
Seedphrase backup(s)
Passphrase backup(s)
PIN

It's game over if:

Passphrase is lost
HWW wallet is lost and EITHER seed phrase OR passphrase is lost (you need both for recovery)
PIN is forgotten and EITHER seed phrase OR password is lost (again, you need both for recovery)

Often, with single sig, it's suggested that you keep passphrase and seed phrase separate, and unfortunately a lot of people think of the passphrase like an account password - but it's not. If you lose it, you're done, you can't reset it. That's such a huge newcomer pitfall.

So if you lose ANY of the items above, best case scenario is, you've been reduced to a single point of failure. And this isn't to mention the fact that if you store any of these digitally, it likely defeats the purpose of having a cold wallet in the first place.

If you set up collaborative custody multisig w/ unchained, here's what you need:

HWW A
Seedphrase A
PIN A
HWW B
Seedphrase B
PIN B
Account login / ID verification for third party like Unchained
*XPUBS file

So, this sounds complicated, but this is what it takes to lose your bitcoin:

Between HWW A, Seedphrase A, HWW B, and Seedphrase B, lose THREE of those
Third party completely fails and you lose your XPUBS AND either HWW A AND Seedphrase A, or HWW B AND Seedphrase B

Notice - you don't need to stress about the PIN, and you don't need to keep track of a passphrase. You keep track of 4 physical items, and you're only pwned if you lose 3 of them.

*asterisk for XPUBS file, because this doesn't actually contain sensitive info to compromise a wallet. You need it in the second recovery situation, but you can store it digitally in a password manager, cloud, on your computer, or all of the above. You can make it really difficult to lose and don't have to handle it with the same level of security as a private key.

So to me... Multisig takes more set up, but it's SO much simpler to maintain. You can set it and forget it, and if something goes wrong, it's not dire. You don't have to scramble to secure funds, you can have peace of mind, and take your time re-securing your funds.

EDIT: for $5 wrench attack, you can just give a HWW to the attacker, and they won't realize they can't actually access your funds with it. Or, if you're really worried about it, you can use ColdCard or another wallet that has duress funds.

15 sats \ 5 replies \ @TheL0wner 31 Mar 2023

all of that assumes your collab partner continues to exist. otherwise recovery is a giant pain in the ass when it is possible at all. I'd rather trust in my own ability to not lose important things.

0 sats \ 2 replies \ @frostdragon 31 Mar 2023

Even if it’s a pain (which is ultimately relative), it’s way better to have a real option to recover funds instead of losing them completely, like if you lose a passphrase.

Think of collaborative custody as security diversification. There are real benefits to using experts that specialize in bitcoin wallet security, especially when the only risk in the event that they become FULLY compromised is some added inconvenience.

Security is not convenient.

0 sats \ 1 reply \ @TheL0wner 31 Mar 2023

security can very well be convenient, it's all up to you.

10 sats \ 0 replies \ @frostdragon 31 Mar 2023

To some extent yes - it's all about balancing what's practical/convenient vs what's actually secure.

For example, using the same password for everything is more convenient than using a different one each time. Using a password manager is a good compromise, but is still more inconvenient than just using the same password for everything, especially when there's no autofill. Using MFA always adds inconvenience, and the things that make it more convenient bring the potential for vulnerabilities. Using a hardware key (like a yubikey) is probably the best form of MFA, but requires the extra step of having a physical device.

Bitcoin is objective and irreversible, and to take security as seriously as is necessary, there is going to be some inconvenience. Engraving a seed phrase into metal is less convenient than writing it on paper, but it's disaster-proof.

And I mean, ideally, your single-sig recovery process doesn't require going to a second location. That's inconvenient. But it's safer than keeping everything at your house.

reply on another page

0 sats \ 1 reply \ @takaponka OP 31 Mar 2023

Another problem of collaborative multisig ! Still another one, any centralized database will leak. 99% users of HWW send with real names addresses and numbers, once the data leaks they are now targets for all kind of attacks. Unchained, Ledger, indirect sellers like Amazon ...

10 sats \ 0 replies \ @frostdragon 31 Mar 2023

First off - if your view is that breaches are inevitable (which is not unreasonable), hot wallets are a significantly bigger target.

Second - if ledger or trezor were breached, an attacker could come to your home and steal it. You’re either done right then and there, or you have a backup that you’re fully reliant on. Multisig fixes this.

In the worst case scenario for unchained, they lose every private key - you STILL don’t have a single point of failure, you can easily recover funds, and the attacker can’t do anything with the unchained keys. Not only does that make them less of a target, it makes them a futile target.

189 sats \ 0 replies \ @DeltaClimbs 31 Mar 2023

Who is losing their bitcoin in hot wallets with passphrase generated on impermanent Linux machines with networking seldom on? Not the safest, but seems risk is overhyped.

0 sats \ 3 replies \ @tomlaies 31 Mar 2023

HWW and cold storage however are an absolute must where savings are concerned

What's the advantage over paper wallets for normies?

0 sats \ 2 replies \ @TheL0wner 31 Mar 2023

for normies? ease of use. I can't see any normie using a paper wallet to spend btc properly. and spending will happen eventually even with savings.

0 sats \ 1 reply \ @tomlaies 31 Mar 2023

I can't see any normie using a paper wallet to spend btc properly.

What do you understand under "cold storage". For me, definitely not spending.

0 sats \ 0 replies \ @TheL0wner 31 Mar 2023

cold storage is a wallet whose keys / signing device is never online. as opposed to a hot wallet.

193 sats \ 0 replies \ @DarthCoin 31 Mar 2023

Yes, indeed, you are right. I agree with you in certain level.

I even wrote a specific guide about how to setup a TailsOS USB.

I myself I do not use anymore a HW. Why? Because I am comfortable with software and I have a good knowledge level of securing my BTC wallets.

But I usually be careful to WHO am I recommending this kind of scenario.

some users are not so good with linux, and tech in general. So a TailsOS will not help them too much. For a 60 years old mom that barely send an email, a HW is OK and simple.
some users want to learn more how to use TailsOS but also could start with a HW and later move to a next level using Tails
some users are fucking afraid of software, so no Tails will touch them
some users will gladly use Tails but they still don't know how, so I wrote that guide.
some users are corporate users and they really need a multisig scenario, because will not be the only ones signing a tx and also are involved a good amount of BTC.

Indeed for a simple user with barely 1BTC holding, is too much a multisig and even a HW if the user is comfortable with managing well the software.

In general you are absolutely right, is enough to manage a XPUB to deposit to your cold wallet.

I always recommend to setup a cold wallet and keep it safe, not opening at all, just deposit when is needed.

As I always said: use the 3 levels stashing: HODL (vault), cache (managing funds), spending (LN wallets). Described in this specific guide - Be your own bank, but think like a bank

https://i.postimg.cc/MTL2kvT0/3level-stash.jpg

26 sats \ 2 replies \ @Eximpius 31 Mar 2023

LMAO, a normie is going to have even more of a time fucking with tails and electrum. A hardware wallet would be way easier for someone new.

0 sats \ 1 reply \ @takaponka OP 31 Mar 2023

Tails is easy now, and u can delete it and go with any hardware that doesn't have network cards. Not noob friendly tho I admit. I know people with 0 computer knowledge using it.

With HWW 95% will still trust their screens, with an internet windows machine which defeat the purpose of HWW, which is to trust only verified secure hardware.

No solutions is perfect, a newbie will have to make efforts to flash Tails, and way more for HWW multisig solution.

10 sats \ 0 replies \ @kepford 31 Mar 2023

Easy is relative. I don't know how you define normie but most people don't even understand their computers let alone virtual machines or booting off a USB. You are describing a tech savvy person in which case a hardware wallet is not rocket science. It is just different.

If you only have $500 I don't think you need a hardware wallet yet. It is easiest to get people started with a self custody mobile wallet. Its a path/journey. But thank you for sharing.

10 sats \ 0 replies \ @tomlaies 31 Mar 2023

I completely agree.

Hot wallets on modern hardware like an iPhone are more than secure enough.

Paper wallets are adequate. 24 words in a safe and only pubkey address to send to.

That's it

10 sats \ 0 replies \ @billiam 31 Mar 2023

Or just use a VM (e.g. virtualbox or vmware) with encrypted virtual disks and the guest vm not connected to the internet.

HWWs are devices that can be hacked like any other device as the chance that zerodays or clever tricks exist to exploit a device is > 0. The question is how big the attack surface is compared to a stupid simple setup like using Tails and an old laptop or encrypted VMs + electrum wallet.

Seeds can be stored in the cloud (yes, they can be stored securely): encrypt them using AES-256 and a password > 18 chars, then base64 the binary and store it as a secure note in a vault (bitwarden secure notes). Honestly, I don't want anyone find a metal plate with seeds stamped into it in my backyard or at the oak tree.

25 sats \ 4 replies \ @nerd2ninja 31 Mar 2023

I try to keep boobies from putting in $500 in the first place. They just aren't ready for that. Instead, I direct them here.

https://armantheparman.com/bitcoin-storage-get-better/

Which is part of a larger compilation of guides I've put together

https://github.com/nerd2ninja/bitcoin-sop/blob/main/Funds_Management/Stages_of_storage.md

Oh and I try my best to skip over "level 1"

10 sats \ 3 replies \ @brxyz 31 Mar 2023

Boobies?

10 sats \ 0 replies \ @tomlaies 31 Mar 2023

I want boobies and $500 too

0 sats \ 1 reply \ @nerd2ninja 31 Mar 2023

Congratulations, you got me. I'm using my phone.

Noobies

1 sat \ 0 replies \ @brxyz 31 Mar 2023

I know, I just wanted to be childish for a moment.

10 sats \ 0 replies \ @Atreus 31 Mar 2023

From what I've seen, many people just start with hot wallets for self-custody. It's not great, but once they have enough saved that losing it would hurt, they magically get motivated enough to research better solutions, and then make their own decisions.

Giving someone you're not directly responsible for "advice" is always a bit dangerous IMO.

25 sats \ 10 replies \ @frostdragon 31 Mar 2023

The thing is, eventually, HWW and multisig will become the intuitive norm. They have to, that's the only way bitcoin survives without everyone losing their money all the time. The only good practice is air-gapping your wallet, and you're right, mnost people either don't understand that concept or don't get why it's important. It's going to take a lot of learning and unlearning to get to that point.

The first thing a newcomer needs to do is familiarize themself with: A) the concept of self-custody, because that's foreign to most people, and B) SECURE self-custody with zero single points of failure, which is really only possible with air gapping (HWWs) and multisig.

Like, seriously, that is the most important step for a newcomer. The time investment to familiarize yourself with this is just as important as buying bitcoin in the first place.

I don't think there's a problem getting off zero with bluewallet or something similar, but priority #1 should be secure self-custody.

Fortunately, there are simple guides out there. Unchained Capital has really great, free resources, and their collaborative custody model is a really user friendly multisig method.

68 sats \ 9 replies \ @takaponka OP 31 Mar 2023

Single sig is still the best for most usecases ... Maybe I don't realize the need for multisig because I lack tech knowledge. In case of 5 dollars wrench attack, multisig won't save your ass "you understand bro I only have this key right now can't give you the money bro" => you will die

If I have my 12 words in my head and some steel plates which can be recovered by instructions if I have big accident or die, how is that a single point of failure ?

I don't know if I express myself good enough, for me cold wallet is necessary for big savings, multisig is not. Lot of people have lost their funds because of a complex multisig setup, losses due to single sig are laughable.

41 sats \ 1 reply \ @nerd2ninja 31 Mar 2023

"Hold up let me call my mom. She has the other key."

"Hey mom I'm um trying to buy a possum can you sign this tx for me?"

Possum is a distress word in this example. Mom was told if she got a phone call like that, to call the cops.

Its basically the same thing we got with bank accounts. Get someone else involved who can delay long enough to get law enforcement to resolve the situation.

25 sats \ 0 replies \ @ek 13 Apr 2023

This so much

I see multisig like this:

Even if you want, you can't hand over your keys
in case they want you to collect enough keys to sign a tx, there is a chance to get help
if they really would kill you (even though they gain nothing from it), multisig or singlesig doesn't matter.
if enough people use multisig, attacks on bitcoin people will make less sense because of high risk/low reward

10 sats \ 3 replies \ @jgbtc 31 Mar 2023

The only defense to a $5 wrench attack is having a decoy wallet you can hand over with hopefully sufficient amount on it to appease the attacker. Multisig works for the scenario where someone breaks into your home when you're not there and gets your coldcard.

5 sats \ 0 replies \ @frostdragon 31 Mar 2023

Multisig does not nullify $5 wrench attack defense.

First off, multisig is long term savings, deposit only. Ideally, you don't even have that wallet anywhere on you. If you want to keep a smaller amount of bitcoin accessible to spend from, you can totally do that.

Second, if for whatever reason, you want to keep a multisig HWW on you, you can still use something like cold card that has duress defense options.

But IMO, a multisig wallet is a GREAT decoy wallet. You can just hand it over, give them the PIN and everything.

0 sats \ 1 reply \ @ek 13 Apr 2023

What about a own $5 wrench?

3 sats \ 0 replies \ @frostdragon 13 Apr 2023

Wrench sword fight!

5 sats \ 2 replies \ @frostdragon 31 Mar 2023

See my response to TheL0wner above, that addressed a lot of this. This is definitely a good conversation to have.

10 sats \ 1 reply \ @takaponka OP 31 Mar 2023

"They have to, that's the only way bitcoin survives without everyone losing their money all the time. The only good practice is air-gapping your wallet"

I don't agree with this statement. So only good practice is airgapped or multisig or both ?

It's a good conversation indeed !

For now the 7M BTC lost are due to :

human errors (loose single sig private key, in the case or you don't even understand singlesig multisig won't save you)
attacks that requires human error (SE, phishing)

Always human errors involved, if they exist with singlesig I don't even imagine the amount of learning and education not to have more with multisig.

So I'm not persuaded that all users with multisig/HWW solution would have reduced these losses. For me it's absolutely necessary when people know that you or your entity has big funds.

10 sats \ 0 replies \ @frostdragon 31 Mar 2023

There are no real numbers on this, but…

A lot of people lost their bitcoin by:

losing a HWW
losing a passphrase to a HWW, thinking it was similar to a website password
trying to make single-sig too complicate because they recognize it‘s a fragile setup

Collaborative custody multisig w/ unchained / referencing their step by step resources avoids ALL of that. W/ multisig, there’s no need to make anything complicated, and no single points of failure means no human error is going to result in loss in loss of funds all of a sudden. If you make a mistake, it’s really easy to fix it and move your bitcoin to a new wallet.

Secure single-sig is WAY more complicated and fragile than multisig

10 sats \ 2 replies \ @falsefaucet 31 Mar 2023

there are tradeoffs everywhere.

as long as those are known and shared.

whatever someone chooses is their prerogative.

but tradeoffs should be shared.

signing device maxi here. seedsigner ftw

242 sats \ 1 reply \ @takaponka OP 31 Mar 2023

100% always tradeoff, fucking tradeoffs 🤣

35 sats \ 0 replies \ @ek 13 Apr 2023

https://i.imgflip.com/7hzjrq.jpg

5 sats \ 0 replies \ @TheBTCManual 1 Apr 2023

I agree, I just think that again the dread "it depends" comes into play, for some the HWW is a way to bring the idea of bitcoin into the physical world, for those who get a bit iffy with the idea that something is code and it's just living out there in cyberspace the HWW gives them some psychological cope, even though there's no fucking bitcoin on there but ssssh don't tell them that, most people don't need to know that a HWW doesn't hold any bitcoin lol

These tools often come with guides and community guides to help people and they feel safe because theres a logo behind all this stuff

As for the HWW and MS industrial complex this im with you on, I get its a product and a way to make money on bitcoin, but this fear mongering people into oh if you don't have a signing device or you don't have distributed keys you going to lose all your money is creating a narrative to sell you the solution

A lot of people can just get away with a Hot wallet and like you say DIY cold storage and splitting their corn between various single sig wallets, but people are lazy and dont want to learn they want to be spoon fed

5 sats \ 0 replies \ @brxyz 31 Mar 2023

There's clearly a market opportunity to package Bitcoin onboarding into a relatively frictionless experience with simplistic language.

5 sats \ 0 replies \ @9ener1c 31 Mar 2023

We're still in the early days of Bitcoin, and the truth is IMO that all current solutions are too complex and anxiety-inducing for the average person. Almost every single person on this site is in the 99% percentile for technical savviness.

I see a couple of solutions arriving in the next 5 years, both of which will create a nice comfortable veneer over the complexity that exists today, and help transition Bitcoin to a medium of exchange for the next billion people.

We will have physical locations where real people act as a participant in multi-sig transactions (maybe some banks will start to provide these types of services soon)
Voice-driven LLMs will run locally on hardware wallets, and they'll smooth out every type of operation. Today's wallets are awesome – I have a Jade and love it – but for various reasons, they're not close to being usable for most people.

10 sats \ 0 replies \ @franzap 31 Mar 2023

Backup on paper is the most dangerous thing. More likely to lose/get words stolen than a hacker taking control of your computer.

SeedXOR is a great solution.

5 sats \ 1 reply \ @takaponka OP 31 Mar 2023

"Ho and you understand, once you have your ledger you must buy a Trezor, because what if Ledger are compromised and pushes backdoor in their soft"

Is there actually one case where a hot single sig wallet was attacked successfully, without phishing or user mistake ? If they succeed on single sig they why wouldn't they on multisig ? It all depends on attack vector like for privacy ...

I totally see the point if you're a big company or a big name, but for other cases I don't see the point enlight me aha

0 sats \ 0 replies \ @xz 31 Mar 2023

I have heard of social engineering attacks where ssh/login attempts have been made to vps, ostensibly to steal funds. Fortunately not heard of any funds lost this way.

There was the story about similar social engineering, tg imposter convincing sb to transfer funds from a borked node. Felt bad for that chap.

I agree. Complexity kills it for many, and can be overkill in many cases.

5 sats \ 0 replies \ @Neo 1 Apr 2023

Agree, with one exception: Stop sending newbies to exchanges like Coinbase etc. because most of them will out of fear start leaving their stack on these exchanges.

Instead: Send them to exchanges like https://relai.app where they will start immediately with self custody, so they get used to it. On top, tell them once you have accumulated an amount that becomes serious for them, get a hardware wallet. But not before.

5 sats \ 0 replies \ @fedelang 31 Mar 2023

So basically you are complaining about the HWW cost?

Most ppl I orange pill don't have a problem buying a hardware wallet. But most of them definitely will get lost at "tails.."

Coldcard, trezor, ledger, .. are very easy to use. When you orange pill you need to make sure you told and showed how to operate onchain, its a disclamair. And my disclaimer is: you better buy and setup ur HWW.

5 sats \ 0 replies \ @arcanox 1 Apr 2023

We should encourage good opsec. If we don't we'll end up having a majority of the coins being held on exchanges. We should stop treating people like morons.

0 sats \ 0 replies \ @hyperfree 18 Dec 2023

Cool setup. Just bear in mind that a 'garbage PC' also costs you 150 bucks these days, unless you find one for free.

0 sats \ 0 replies \ @kristapsk 1 Apr 2023

Blockstream Jade costs 65 USD, not 150.