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Author Topic: Multisig Wallet Setup - Security Tradeoffs With Pruned Bitcoin Core Node?  (Read 55 times)
AdamHurwitz (OP)
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May 03, 2021, 01:45:33 AM
 #1

What are the security tradeoffs of running a pruned Bitcoin Core node for a multisig wallet, such as Specter?

It seems that using a multisig wallet with a pruned Bitcoin Core node could be a good incremental improvement of securing assets vs. storing funds on an exchange or on a single seed hardware wallet.

1. How is the pruned node run for Specter? Is it running off of Bitcoin Core directly?

I've heard that similar services, Unchained Capital, run a node supported by Blockstream if I understand correctly.

2. Is the privacy risk mitigated by connecting Bitcoin Core's pruned node through Tor/VPN (That do not save/collect logs)?

Chain analysis companies are able to gather information from non-self-hosted nodes and tie it to personal information.

3. Are there additional tradeoffs to consider?
pooya87
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May 03, 2021, 04:17:47 AM
 #2

It seems that using a multisig wallet with a pruned Bitcoin Core node could be a good incremental improvement of securing assets vs. storing funds on an exchange or on a single seed hardware wallet.
* When you have your bitcoins in an exchange (or any custodial wallet for that matter) you have zero security and zero privacy because the third party controls your money not you.
* Security of a multi-sig versus a single sig is not that different as long as one person is the owner of all keys. Multi-sig scheme is useful for multiple parties or at least if you are both creating and storing the keys separately otherwise it is the same as a single-sig.
* Security of running a full node versus a light client is obviously higher. Being pruned doesn't change the fact that the node is still a full node, it just doesn't store the historical blocks that are too old.
* Security of an offline storage is higher than a hardware wallet and is higher than an online wallet including a full node that is connected to the internet (operating on an online computer).

[I'm not familiar with Specter to comment on it]

Quote
Chain analysis companies are able to gather information from non-self-hosted nodes and tie it to personal information.
Chain analyzers are analyzing the "chain" not the network although that is a possibility but it is a much harder thing to do. However, you do gain additional privacy when running your clients through TOR since it prevents other kinds of attack such as packet sniffing.

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hugeblack
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May 05, 2021, 10:56:40 PM
 #3

Multi-signature wallet gives the power to spend money for several parties and according to certain conditions, which means that neither you nor the platform owns these currencies, and therefore the platform will not allow you to buy and sell because you do not own those currencies.
If you mean Blockstream is a greenaddress wallet then *in my view* it is not a successful idea and adding more complexity to something that is not worth it.
Adding VPN/Tor to Bitcoin Core will enhance your privacy but mistakes always happen so don't think you completely hidden.

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