Nunchuk (I): Fundamentals and Security Mindset

Design Philosophy (in one idea)

• Collaborative and non-custodial: your keys rule; third parties (family, advisor, “agent”) only act as co-signers or optional backups.
• Private inheritance in consensus: inheritance plans rely on cryptographic secrets and timelocks, not identity/KYC.
• Standard operation: PSBT for on-chain signing (each cosigner adds their signature until the threshold is met).

Social Multisig and Key “Roles” (recommended pattern)

Practical names to think about your architecture —not “official” labels, but they reflect real-world flows in Nunchuk:

• Key-User (operational): your main day-to-day key(s) (e.g., hardware + mobile).
• Key-Backup (redundancy): a key stored offline (another hardware wallet in a safe or different city) for loss/failure.
• Key-Agent (optional co-signer): a trusted third party (family/advisor/service) that cannot move funds alone but helps meet the threshold when needed. This is the basis of collaborative custody.

Key benefit of multisig: robust and secure —you can lose one or more keys and still retain access; spending requires multiple signatures.

First Steps (minimum viable)

1) Create your vault (example 2-of-3)

1. Install Nunchuk and connect two hardware wallets + 1 software key (or third hardware).
2. Create a 2-of-3; save the configuration file (BIP-129) and seeds (BIP-39).
3. Verify each device recognizes the vault and can sign PSBT. (Coldcard and others require importing PSBT/descriptor to sign).

2) Add timelock policies (recovery/inheritance)

• Idea: “2-of-3 to spend today; if X months pass, an inheritance key can spend with 1-of-1.”
• In Nunchuk, this is implemented via an inheritance plan (time-locked key + beneficiary) while maintaining privacy.

3) Partial signing tests (PSBT)

• Create a transaction on testnet, sign with Key-User, export PSBT, pass it to the second cosigner, complete the threshold, and broadcast. Standard flow in Nunchuk.

Security Mindset (how to think about your setup)

1. Define your threat: loss of 1 device, home theft, travel, inheritance.
2. Map key roles: which keys do you use daily? which one is your backup? who could be an agent?
3. Physical separation: store keys in different geographic locations.
4. Plan B with a clock: set a reasonable timelock (e.g., 90 days) to activate an emergency/inheritance key.
5. Written procedures: key rotation, agent contacts, recovery steps if X is lost.

Best Practices (what truly saves you)

• ✅ Testnet first: practice the full PSBT cycle before mainnet.
• ✅ Double backups: seeds (BIP-39) + config file (BIP-129). Without the config file, rebuilding multisig is harder.
• ✅ Simulate key loss: use the key replacement function and document the process.
• ✅ Hardware diversity: mix vendors (reduce systemic risk) and confirm PSBT compatibility.
• ❌ Don’t centralize all keys in one house or bag.
• ❌ Don’t rely on memory: print/store a playbook (what to do if X happens).

Practical Case (2-of-3 inheritance template)

• Today: spend with Key-User + Key-Backup.
• If 6 months pass with no activity: the Inheritance key can spend alone (timelock triggered).
• Who is who:
  • Key-User = your primary hardware,
  • Key-Backup = hardware in a safe,
  • Key-Agent = advisor/family member helping complete signatures when needed.
• How it runs: Nunchuk coordinates PSBT between cosigners; the inheritance plan uses secrets/timelocks (no paperwork).

Useful Resources and Guides

• How Nunchuk works (multisig): nunchuk.io/how-it-works
• Plans (Honey Badger) and inheritance info: nunchuk.io/individuals • nunchuk.io/inheritance
• Recovery/PSBT step-by-step: resources.nunchuk.io/wallet-recovery/collab-wallet/
• Hardware + PSBT compatibility: coldcard.com/docs/ready-to-sign/
• Key replacement (secure rotation): nunchuk.io/blog/key-replacement

Closing (today’s action)

• Create a 2-of-3 vault on testnet, save BIP-39 + BIP-129, run a PSBT send, and document how to rotate a key if you lose one.
• Question for the community: what threshold/timelock would you use for a realistic inheritance plan and why?

Next post: Nunchuk (II) — inheritance, family co-custody, and daily operation (key rotation, quarterly testing, anti-panic checklist).