Planning a video on the ultimate bitcoin setup, what would you like to see?
293 sats \ 11 comments \ @rodarmor 14 Aug 2022 bitcoin
I make a bitcoin podcast with my friend, and we’re planning to make an educational video where I help her set up an advanced personal bitcoin custody set up.
So far, I’m thinking:
  • Phoenix Wallet on her phone as her day-to-day wallet. Phoenix is a full Lightning node on your phone, with private keys that you control. There are privacy concerns, given that your channels are with the app makers. However, when I’ve used apps like Zeus and Zap, which allow you to make payments using a self-hosted lightning node, I’ve found the to be a bit buggy and unresponsive, and also a bit too complex to recommend to a non technical user.
  • Coldcard + Sparrow Wallet + Bitcoin Core single-sig on a laptop as her checking account. Running Bitcoin QT and Sparrow is easy for a non technical user. She uses a Ledger wallet now, and a Coldcard will be a nice upgrade over a Ledger. I just switched from a Ledger to a Coldcard, and bitcoin-only hardware and software tends to be so much better than multi-coin hardware and software, just because the devs can better focus their attention and resources.
  • Coldcard + Ledger + Sparrow + Bitcoin core 2-2 multisig for her savings account. This is for cold storage, and should only need to be used infrequently to transfer funds to her checking account for purchases. I might actually make this a 2-3, with me or another of her friends holding a key, so we can help he recover in case of an emergency.
Open questions:
  • What’s the best seed backup strategy? She rents her place, so maybe the seed should be backed up somewhere like her parents house, so she doesn’t have to think about transporting it or losing it during a move.
  • Can we export her savings account/cold storage xpub/descriptor to a watch-only hardware device, so that she can verify addresses before she makes deposits to cold storage?
  • I think some kind of privacy tech would be a nice addition. Maybe join market as a buffer between her cold storage and checking account?
What do you guys think? Any suggestions for hardware, software, or tweaks? Any questions, maybe related to your own setup, that you’d like us to touch on?
You can find our podcast at hellpodcast.money if you want to check out what we’ve done so far!
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15 sats \ 1 reply \ @tech5 14 Aug 2022
When using Sparrow wallet you could do a coinjoin directly to cold storage.
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0 sats \ 0 replies \ @rodarmor OP 15 Aug 2022
Good idea, coinjoin from and to cold storage would be really cool.
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10 sats \ 2 replies \ @023b419c6a 14 Aug 2022
2 of 3 multisig with Specter. That would be great. Coldcard, bitbox and some other.
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0 sats \ 1 reply \ @rodarmor OP 15 Aug 2022
Definitely! I had never heard of the bitbox, just ordered one so I can check it out.
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10 sats \ 0 replies \ @023b419c6a 15 Aug 2022
Cool. If the video is really good, we could add it to https://docs.specter.solutions/desktop/multisig-guide/
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10 sats \ 4 replies \ @DemandUtopia 14 Aug 2022
What’s the best seed backup strategy? She rents her place, so maybe the seed should be backed up somewhere like her parents house, so she doesn’t have to think about transporting it or losing it during a move.
Safe deposit box at a bank (or even better, a non-bank vault service). Honestly more people should have these for important documents. $100 a year is worth it to know your seed words, birth certificate, etc. are much safer from burglary and house fire.
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20 sats \ 1 reply \ @WaraiOtoko 14 Aug 2022
I agree with the need to have an offsite backup, but only having this backup still leaves a realistic possibility of data loss. You will typically leave it unattended at the bank for years and only try to access it when you lose access to your wallet. At that point there is a possibility that you find out that the backup can be corrupted (if it is on an usb drive) or is otherwise inaccessible.
Generally the best practice for backups of personal data is the "3-2-1 rule" where you have:
  • 3 copies (one of which may be the wallet file on your hardware wallet or computer)
  • with 2 copies on different media (could be seed plates)
  • of which 1 copy is off site.
That way if either your onsite or offsite backup is corrupted or inaccessible the other backup copy is still likely to be valid and accessible. So basically I would say to both keep a backup at home and one offsite in a safe at a bank.
If for some reason you don't feel safe using a seed plate you can also use an encrypted usb drive or multisig, but there are caveats there. Your seed should -never- touch a system that is online, so you need to use something like TailsOS to make the encrypted usb. Also a very real risk is that you lock yourself out of the backup, so you should only use these if you are comfortable working with them (keep it simple stupid).
Also practice restoring your wallets from backups on a regular basis to make sure it works as expected.
In general I feel that making safe and secure backups of your seed phrase is the most challenging part of using bitcoin, so please let me know if I am missing something.
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10 sats \ 0 replies \ @DemandUtopia 14 Aug 2022
Yeah, the "3-2-1 rule" is probably the easiest to explain to an inexperienced user.
I think the seed plate stuff is overemphasized in the Bitcoin community. 3x paper backups (home, bank box, and family/friends's house) is enough for anything other than an extreme edge case. Your house isn't going to burn down, at the same time your parents' house gets hit by a tornado, at the same time your bank floods.
And I thought about recommending an air gap computer solution, since it's so useful for verifying keys, generating seeds, and additional encryption. But I think it's too much for a noob guide like OP is making. Too many places to mess up and the message should be simply "never put these seed words into an phone/computer!"
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0 sats \ 1 reply \ @rodarmor OP 15 Aug 2022
This is an interesting idea! I looked into using a safe-deposit box at a bank, and was super unimpressed with their security procedure. However, this was for a single-sig wallet backup, where if the box was compromised, all was lost. For a multi-sig wallet backup, I think it makes a lot of sense. There are privacy concerns though, since you have to KYC at the bank. A more expensive, but very cool option for anyone who lives in the bay area is Los Altos Vault and Safe Deposit.
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10 sats \ 0 replies \ @DemandUtopia 15 Aug 2022
safe-deposit box at a bank, and was super unimpressed with their security procedure
Depends on the bank. Some places take it more seriously and require you provide an ID every time you access the box. Ask around.
I still think a safe deposit box at the bank is safer than the average person's home for secure storage. The box is much less likely to be impacted by natural disaster and random theft -- who has a safe at home (and most home safes can be broken into in minutes)? Way more likely your hour gets robbed or your friends/family lose the backup you gave them.
There are privacy concerns though, since you have to KYC at the bank.
Your bank has no idea what you have in your box. Your box status is not reported to the government. I think if you're under IRS investigation, they will freeze your bank accounts and also your box. But that is an extreme edge case... this is a noob guide right, not protecting the person for intense criminal prosecution.
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0 sats \ 0 replies \ @rodarmor OP 14 Aug 2022
Oh yeah, I’m thinking coldcard + ledger for the multisig because ideally you want multiple hardware vendors, so two separate supply chains would have to be attacked, or two separate vulnerabilities would have to be exploited for your funds to be at risk.
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