Electrum for Armory users

[picobit]

Hi,

Seriously considering migrating from Armory to Electrum, mainly as maintaining two copies of the entire blockchain on my laptop is no longer viable (and because Armory dropped Mac support).  Electrum has a cold storage facility just like Armory.  But does it have an equally secure way of making paper backups?

Armory can make, say, a 3-of-5 backup where I can store the five sheets of paper in five secure locations, and as long as I can get to three of them, I can restore my wallet.  And if Dr. Evil gets two copies, he can do nothing.  Does electrum has a reasonably easy way of doing the same?

Otherwise, I was considering using Armory for the backup: Creating an Armory wallet on the offline machine, make a 3-of-5 backup, use the first private key of the wallet as a seed for Electrum.  Is that doable?  Is it a bad idea for some reason I have overlooked?

[ThomasV]

You can create a multisig wallet, with several seeds.
Each seed will be your paper backup.

see http://docs.electrum.org/en/latest/multisig.html

you will have to write the seeds manually.
(it is not safe to send the unencrypted seed to a printer device.)

[picobit]

Thanks!  But that is slightly different, I will end up with needing to sign each transaction on multiple computers.  That is highly useful, but not for me, I just need a single offline wallet on a raspberry pi.  It is only the backup I need to split, with Shamir secret sharing scheme, or something like that.

[ThomasV]

Thanks!  But that is slightly different, I will end up with needing to sign each transaction on multiple computers.  That is highly useful, but not for me, I just need a single offline wallet on a raspberry pi.  It is only the backup I need to split, with Shamir secret sharing scheme, or something like that.

No, you can sign the transaction with a single wallet that holds all the seeds.
Create a bunch of seeds, then go to "restore wallet", pick "multisig", and enter your seeds there.

Edit:
You could also create a xprv key with Shamir Secret Sharing, and restore your wallet from it. This will not require multisig transactions.
Unfortunately there is no way to do this directly in Electrum.
What you need is a tool that takes a xprv key (or an Electrum seedphrase), and splits it using Shamir Sectet Sharing.
Maybe we could add such a tool to Electrum.

[picobit]

Thanks for your reply, ThomasV. 

I did not know that I could use multisig in that way.  I realise that I am probably talking to one of the main developers, so maybe you can tell me if I understand this correctly:

If I create a 2-of-3 multisig wallet on the offline machine, then I have three chains of private keys that I can back up separately on paper.  The watch-only (online) wallet will then have three chains of public keys.  If I lose the offline machine, I can use two of the paper backups to create an offline wallet that now only contains two of the chains, but that is enough to sign any transaction made by the watch-only wallet.

But if I lose both computers (burglary, house burns, or something like that) then two paper wallets will no longer be enough, since I then only have two of the three chains of public keys, and I need all three public keys to derive the bitcoin address, and thus to be able to generate the transaction that can be signed with only two private keys.  Or do I miss something?

In that case, multisig is not quite as safe to backup a single wallet as Shamir secret sharing.

I guess I should start experimenting with Electrum. 

[picobit]

Thank you, nerioseole, for another enlightning reply.  You even answered my next question in your edit - I am considering putting a full node in the cloud, and then use that as my own electrum server.   I was under the impression that Electrum could also fall back to SPV mode if there are no servers, but maybe I am mistaken.

I will definitely consider using a Trezor.  I have been a bit reluctant since I am not sure what happens if it breaks and they go out of business, but I presume the private keys can be recovered from the seed without a Trezor.  I also have to convince myself that somebody getting hold of both my laptop (with the watch-only wallet) and the Trezor cannot spend the funds.

Otherwise, I will probably do the SSSS trick with the electrum seed on an offline raspberry pi, and use that as the offline wallet.  I am aware of the theoretical risk of transferring malware between my laptop and the R-Pi over the USB stick (this nasty hardware exploit people are talking about), but that almost seems to require somebody targetting my setup specifically, and I do not believe I have near enough BTC for that to be worth the effort

SSSS in electrum would be nice.  Alan Reiner from Armory always says that one's heirs should be able to recover the funds - that will be a lot easier if all they have to do is to copy the three parts of the key into Electrum

[japerry]

I will definitely consider using a Trezor.  I have been a bit reluctant since I am not sure what happens if it breaks and they go out of business, but I presume the private keys can be recovered from the seed without a Trezor.  I also have to convince myself that somebody getting hold of both my laptop (with the watch-only wallet) and the Trezor cannot spend the funds.

You might want to also consider the Ledger Wallet. I too was concerned about the what-if's of it breaking or becoming damaged. I solved the problem by ordering 2 of them and just keeping one as a backup. At about $15-17 USD (for the HW.1 version) it's one of the best investments I've made in my Bitcoin endeavor. Also Coin Center was doing a give-away on the Ledger HW.1 a few months ago and I was one of the lucky winners so now I have 3 HW.1's

[BitcoinNewsMagazine]

Thank you, nerioseole, for another enlightning reply.  You even answered my next question in your edit - I am considering putting a full node in the cloud, and then use that as my own electrum server.   I was under the impression that Electrum could also fall back to SPV mode if there are no servers, but maybe I am mistaken.

I will definitely consider using a Trezor.  I have been a bit reluctant since I am not sure what happens if it breaks and they go out of business, but I presume the private keys can be recovered from the seed without a Trezor.  I also have to convince myself that somebody getting hold of both my laptop (with the watch-only wallet) and the Trezor cannot spend the funds.

Otherwise, I will probably do the SSSS trick with the electrum seed on an offline raspberry pi, and use that as the offline wallet.  I am aware of the theoretical risk of transferring malware between my laptop and the R-Pi over the USB stick (this nasty hardware exploit people are talking about), but that almost seems to require somebody targetting my setup specifically, and I do not believe I have near enough BTC for that to be worth the effort

SSSS in electrum would be nice.  Alan Reiner from Armory always says that one's heirs should be able to recover the funds - that will be a lot easier if all they have to do is to copy the three parts of the key into Electrum

As long as you have your seed you can recover your Trezor to any BIP32, BIP39 and BIP44 compliant wallet like Electrum. No one can spend your funds unless they know the PIN code for your Trezor, and you can add an additional layer of protection by protecting your wallet with a passphrase. Ledger is less expensive than Trezor but you do get what you pay for. The screen on Trezor is a significant security measure and worth the extra money. Have you taken the time to read the Trezor user manual?

[picobit]

Have you taken the time to read the Trezor user manual?

Not yet, but I will definitely do so before deciding what to do!  It is, after all, not urgent.