It's so early. I'm your host, Will Schoellkopf, founder of the ~HealthAndFitness Territory, and my co-founder, @grayruby, amongst @Undisciplined and @IamSINGLE, encouraged me to record this episode and make this post to say how, yes, navigating my Bitcoin wallets and multi-sig wallets is an exercise of mental fitness.
So I think it's important when it comes to security, to your Bitcoin security, it's not necessarily an OPSEC issue. You don't have to keep it a secret. If your Bitcoin really is secure, you should be able to talk about how you secure it openly and still sleep peacefully at night because it really is secure rather than just hope nobody figures it out. So I have acquired a certain amount of Bitcoin stacking from the top, from class of 2021, from $62,000 all the way down to 2022, $16,000. Never selling, never selling. And of course, buying all the way back up, buying all the way to the current price, $100,000.
And I had secured that Bitcoin two years ago through Unchained Capital with collaborative custody multi-sig. If your Bitcoin is going to be generational wealth, I think a single sig is not enough. I don't think that's enough protection. I don't think it protects enough against multiple points of failure. I treat it as a single point of failure. There's things you can do. You can add a passphrase and then there's two different pieces of information needed. But then I think you also run the risk of over-complicating your life. So collaborative custody multi-sig, that seemed the way to go.
Unchained Capital at the time charged no account fee. It was a free service. You just maybe paid for them to sign. Multi-sig, I know I'm listening to an advanced audience, so I don't need to explain the basics, but collaborative custody multi-sig, I controlled two of the three keys and Unchained Capital had the other key. So if I ever lost access to one of my keys, it wasn't a single point of failure. I was able to still spend my Bitcoin with Unchained Capital's help. And likewise, if Unchained Capital went out of business or worse, which is what actually happened, I refused to pay the $250 account fee, they would turn off my access to the website. So my Bitcoin is still there. My Bitcoin is still on chain, but definitely when I was making transactions from my two of three multi-sig vaults, I was always using Unchained Capital's website. I was always using their interface. And if I'm not going to pay, they're not going to let me use their website and interface.
But I am an expert Bitcoin user. Definitely. We all are. Any of us on Stacker News, if you've gone this far, you're definitely an expert. So let me do it. Let me do my multi-sig myself. At the minimum, I needed to get my Bitcoin off of the Unchained Capital platform entirely. That's a pretty precarious position for my generational wealth to be in this two of three multi-sig where I've lost access to spending one of the keys. It effectively makes it a two of two multi-sig, something that I don't want either because it's like a single point of failure all over again. You lose one of the keys and you're done. When I was using Unchained Capital, I was using a Trezor and a Ledger and a cold card. I was actually using two different vaults. So I had my two different stacks, like a bigger stack and a smaller stack. So I have experience with Ledger and Ledger Live. I have experience with Trezor Model T and Trezor Suite. And I have experience with the cold card. And is the cold card Mark 4. And I was using Sparrow Wallet. And the version of Sparrow Wallet that I had was 1.18.
Sparrow Wallet is fantastic. It's amazing. When I went to the Bitcoin conference in Miami in May 2023, and I went to the open source stage, I had to see Craig Raw, the open source developer of Sparrow Wallet. If this guy is going to write the code for my how I'm managing my generational wealth, I really ought to see him in person and see him do his run through of Sparrow Wallet. My experience using the Sparrow Wallet with the cold card, because CoinKite, which produces the cold card, doesn't provide you a wallet software. Ledger provides Ledger Live. Trezor provides Trezor Suite. But the cold card, you're on your own. It's up to you to figure out a wallet software to navigate your cold card. So Sparrow Wallet is great. It is fantastic. But the user experience leaves much to be desired.
It gives you all the intricate details, all the nuanced, advanced details, which I love as a Bitcoin expert. But that's a lot of hurdles to clear to figure out what's going on and know what you're doing. The best part about Sparrow Wallet, I think, is it really makes change addresses really clear, like this idea of a change address and really thinking about where is the Bitcoin going in the change address and how do change addresses work and how do they pair with the typical addresses presented. Because in Ledger Live and Trezor Suite, as much as they show you the addresses, they don't show you the change addresses, which makes it easier. But I mean, that's important to understand what's really happening in your UTXO.
So first up, of course, go to upgrade my Sparrow Wallet to Sparrow Wallet 2.0. And wow, has Sparrow Wallet had a massive upgrade. I mean, oh, my gosh. Congratulations, Craig Rawe. You have smashed it out of the park because he's updated his Sparrow Wallet API to support all of the modern wallets. So I can use my Ledger with Sparrow Wallet, which I had to to sign a transaction to get it off the Unchain Capital Vault. I can use my Trezor Model T with Sparrow Wallet. And obviously, I can use my cold card with Sparrow Wallet. And they really do make it so easy. I just have my USB key and I attach.
Now again, why is this an exercise in mental fitness? The best part to me of Unchain Capital was they would do something called a quarterly key check where they really put it on me every quarter to just kind of log into the platform, use my hardware wallet and kind of do a signature just to prove to myself and to Unchain Capital that if I needed to spend the funds or use the funds, I could do that. I knew physically where my hardware wallet was, that my dog hadn't eaten it or taken it and buried it in the backyard, in the outback, Sheila, the Bitcoin dog, as I wrote about in my Bitcoin magazine article. And that it still worked, it still functioned, the screen worked, the button worked. I still remembered my pin.
Best practice is you write down your seed phrase, but you don't necessarily write down your pin. Your pin should be something you can just kind of memorize and know. So that's not written anywhere. But with me no longer using Unchained Capital, then I'm, you know, it's not, I don't have these reminders to do these quarterly key checks or half-yearly key checks. So it had been. And of course, I keep my Bitcoin in cold storage. Cold storage is cold. Something I explained to @denlillaapan before was how if you want to send someone Bitcoin, all you need to do is provide an address and that's it. It's done. So even with me stacking, even with me buying on exchanges, I can just send from an exchange to an address. And I know it's bad privacy to reuse addresses, but it's very convenient. But I can send Bitcoin to an address and that's it. I don't need to use my hardware wallets. I don't need to sign anything. So it really is like you only have to use the hardware wallets if you're actually going to send Bitcoin. And when you're just saving generational wealth, so it goes.
So I do want to have the discipline to continue to do a transaction at least once a year, just to prove to myself that I can, because your Bitcoin is only yours so much as you have the power to spend it. Otherwise it's just a donation to the rest of the Bitcoin community. Like that 10 Bitcoin, that Wired magazine bought in 2013 and really did burn the keys.
So sure enough, I'm using my ledger to try to sign a transaction and it's not working. Why is it not working? I figured it out. It was because you had to actually open the Bitcoin app. So just because I unlocked the ledger and I had it connected, I didn't actually turn on the Bitcoin app and that worked. And of course, the important thing is I didn't even bother opening up Ledger Live. I don't care about Ledger Live. I'm never using my ledger again after this, but I'm grateful I didn't have to update the ledger firmware or anything. It just worked.
On the Trezor, I also had issues on the Trezor where I had unlocked the Trezor, but my Sparrow wallet wasn't letting me sign the transaction. And then it was like, oh yeah, duh, like it's unlocked, but I hadn't entered the passphrase. And that's the thing is when I was using Unchained Capital, it could prompt me for the passphrase as part of that platform, but Sparrow wallet didn't prompt me for the passphrase. And the error code was not very easy to read or decipher. So that was something that I'm Googling it. I'm trying to figure it out. Here's the error code. Of course, a million things could be the reason I was wrong. Finally, just took my experience and my knowledge of using my Trezor to realize, oh, I have to enter the passphrase and then it's considered unlocked.
The cold card, that used to be really hard for me. I used to have to go back and forth with the SD card of signing transaction, moving the transaction back and forth, the SD card and the computer. I finally figured out I just, if I'm already USB connected to the laptop, I don't need to worry about that. And of course for Christmas, I got two more hardware wallets.
I got the Blockstream Jade, which I'm very excited about because I've heard about it a lot and Liquid and everything. I got the Blockstream Green software. Oh, I will say quickly when updating the Sparrow wallet software, I tried to update it from within the Sparrow wallet software I already had. I'm really nervous of malware, of course. I'm so grateful that with Sparrow wallet 2.0, they've made it stupid easy to verify it's genuine. Sparrow wallet 1.18, there was these GPG keys you had to install and get this GPG working in the command terminal. Big hassle. Now, Sparrow wallet 2.0, you can just drag and drop these manifest files into Sparrow wallet and it'll give you a check mark. I'm still nervous. There's a way to fake it. I don't know. But yeah, same thing with downloading the Blockstream Green software in the Blockstream Jade hardware wallet instructions. It says go to this URL to download it. So that's the important thing. I'm not just Googling where to get the software. And that was set up.
And then of course, I liked having the Blockstream Jade, Blockstream Green, because if I'm going to take all my Bitcoin off of one vault, I need a place to put it before I put it back on a new vault. So having a single SIG wallet ready to transfer all that Bitcoin to, just like as a temporary thing was so useful. I'm really glad I'm talking to experts here because this might sound convoluted and confusing, but there's a lot of steps involved. Okay.
You have this Bitcoin from this 2.0.3 multi-SIG. You need to sign the transaction. You need to broadcast it. You need to set the fee. You need to make sure you're using every single site you had from every UTXO. Where are you sending it to? To your Blockstream Jade? Have you verified that you have control over this Jade, that you can spend the Bitcoin in this Jade, that everything's good and kosher there? And with my new vault, I got another hardware wallet for Christmas. I got the Trezor Model 5 Safe, which it looks really slick, USB-C swipe style touchscreen.
For the Blockstream Jade, I of course had to update the firmware right away. And what I loved was I had, and it's obviously Bitcoin only, but I had a choice between just the updated firmware or a firmware that would brick the Bluetooth feature to make the Bluetooth not work anymore. And I said, yes, definitely that one. I don't want any Bluetooth on my hardware wallets. That sounds horrible to me. It's already risk enough to connect via USB to a laptop, but I don't need a Bluetooth connect to anyone trying to discover my device or my phone or anything like that. And so I was happy to do firmware to just get rid of that Bluetooth.
The Trezor Model 5 Safe, the Bitcoin only version is the one I got. I don't know what it means to be Bitcoin only, because ultimately I still have to put the Bitcoin only firmware on the device. But I think it just means it comes with the Bitcoin only firmware at least. Maybe it's not able to revert to doing all cryptos, all coins anyway, but definitely very grateful to have the Bitcoin only firmware there. And that was fun too, to keep up with the modern times. I'm used to these 12 word seed phrases, 24 word seed phrases, but the Trezor Model 5 Safe, it comes with recovery sheets of course, but the recovery sheets are ready for 20 words, not 12 words or 24 words. In the setup, it actually says you can do 12 or 24, but they treat that as legacy seed phrases. They're really pushing this 20 word seed phrase to help support Shamir backups. So you can again have just a single seed, just the single Trezor Model 5 Safe, but with the Shamir backups and your 20 word seed phrase, then you don't need to do multi-sig, but you still get that multi-sig benefit by having these Shamir backups.
That's confusing to me. That's complicated to me. I like the keeping it simple, stupid. It's 203 multi-sig. What's my seed phrase? What's my hardware wallet? This hardware wallet is this seed phrase. This hardware wallet is that seed phrase. I just need two of these three to sign a transaction. I thought it was interesting too, going through this process with Sparrow Wallet, that you can't sign a transaction with three keys when I'm building it in Sparrow Wallet. I can't just for fun, sign a transaction with all three keys. Any transaction can have two and only two keys when you sign. That was interesting. I've decided to just go for it. Sure. Why not? Let's try it. Let's try the 20 word seed phrase.
A little bit of me wants to do 12 or 24 so that if Trezor went out of business or my Trezor Model Safe 5 wasn't working, it would be really easy to restore the wallet of that seed phrase on another wallet. Who knows? Maybe 20 words is the way to go. Of course, I plan to keep my Trezor Model 5 safe anyway. If the hassle ever happened that I needed to take that 20 word seed phrase and convert it into its relevant 12 or 24 word seed phrase, there's got to be a way. It's all just information at the end of the day.
That was also the really fun thing about the Blockstream Jade, which continues to make me so bullish on Bitcoin, because it's all information. It's all just keeping information secret. 12 words, what's the meme? Are you keeping 12 words in your head, Anon? Is the government going to ban English? Are they going to ban the English language? Are they going to ban sentences? Are they going to ban 12 words? It's just ways to encode the binary, encode the hex, encode the private key, and just the 12 words. It's just information.
What's cool about the Blockstream Jade, which comes with a camera built into it, Blockstream Jade has the opportunity to be completely air-gapped, where you have a battery-powered Jade, so you don't even need to connect it to a computer. It has a camera, so it can scan QR codes. You don't need to pass information through Bluetooth or USB either. Light is the medium. That's what's so amazing. How is the information getting passed over? It's through light, literally visible light, like a camera scanning, or its screen will show a QR code, and then you'll have a camera pointed in.
So what's cool about the Blockstream Jade is it comes with a 12-word or 24-word recovery phrase sheet, of course, but it also comes with a grid for you to hand-draw your own QR code. It's all just information. Your seed phrase, who says your seed phrase can't also just be a QR code, and you're just hand-drawing a QR code. So that was a fun exercise for me, you know, to put all the phones away, put the laptop away, and have this QR code grid, and have the Blockstream Jade present to me, now hand-drawn in this grid, in this, I don't know, 30 by 40 grid of squares, or 27 by 27 grid of squares, like your QR code. It's got to be more than 27, I don't know how big it is, but it is a big grid. But hand-draw it exactly, and then that was the fun way to test I had my recovery phrase, you know, recorded successfully.
All the hardware wallets are normally just one word at a time. What's your 12th word? What's your 5th word? What's your 7th word? But this was also just use the Jade, scan my own QR code I own, hand-drew, and see if the, you know, fingerprint number it comes up with is the same as it did with the recovery phrase. And it worked. So I've now got my recovery phrase captured information in a pinch in two different formats. And of course, I got to guard that QR code manly hand-drawn with my life, just like my 12 word phrase, because it's all the same thing. But just continuing that bullish trend on all the advanced ways we have to secure your Bitcoin, all the new ways, all the novel ways, all the things to make it easier. I haven't bothered to connect the Blockstream Jade to Sparrow Wallet. I'm using the Blockstream Green software, but I wouldn't see a surprise if it didn't support that too.
So yeah, definitely an exercise in mental fitness, in testing recovery, really increased my self-confidence in Bitcoin and my expert status to, you know, roll my own multi-sig myself, you know, being able to connect with my own Bitcoin node instead of using Emsi's node in Denmark. I mean, I'm sure he's a nice guy, friendly guy, but you know, being able to do it myself. So, wow, you tell me, you tell me your experience with hardware wallets. I saw that interesting chart the other day showing all the different kinds of transactions of UTXOs, pay-to-tap route, pay-to-pubkey, pay-to-pubkey script hash, and how the multi-sig transaction count was way low.
But it's all about your risk tolerance, your risk level, what makes it so you sleep at night. I love the idea of geographically dispersed keys. I'm really thinking of generational wealth. What's the way to make it the most secure, but also the easiest for my next of kin to recover the family wealth of Bitcoin if I passed away? Or could they have enough instructions that they could pass it on to another expert they trust to help them? So you tell me, was this correct for the health and fitness territory? Is this an exercise in mental fitness to just juggle through all of the various ways to secure your Bitcoin and navigate all the hardware wallets? You know, as we say, it's so early!