Wallet Security

[Cruxleo]

I've a single signature wallet but I heard recently that the  multi-signature wallet has more security and that interests me as my stored assets increases.

However, I want to know if I'd be needing to create a fresh wallet, getting new seed phases then move assets to the new wallet Or there's a way I could upgrade to multi-signature using the former wallet.

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[1714489998]

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[OmegaStarScream]

Yes, you're going to need to create a new wallet. You can't keep the one you currently have.

I'm guessing you're using Electrum? If so, you can check this step by step guide on how to create the wallet: https://bitcoinelectrum.com/creating-a-multisig-wallet/

[hosseinimr93]

I've a single signature wallet but I heard recently that the  multi-signature wallet has more security and that interests me as my stored assets increases.

You can increase your security, if you create your multi-signature wallet in a correct way,.
If you are going to create a multi-signature wallet and keep all the seed phrase in one place, you won't increase your security.

Create your multi-signature wallet, if you know what exactly your are doing and don't forget to keep all seed phrases and master public keys is safe places.

[Yamane_Keto]

I've a single signature wallet but I heard recently that the  multi-signature wallet has more security and that interests me as my stored assets increases.

It depends on how you set it up correctly, 2 out of 3 multisig wallets are fine if one is a hardware wallet, the other is in a safe place away from your home, and the third is in a safe place in your home. It's an extra layer of protection. If you can't manage a single-signature wallet, then managing a multi-signature wallet might be a bad option.

[Charles-Tim]

It is also worth to know that the wallet should be on different devices.

Create your multi-signature wallet, if you know what exactly your are doing and don't forget to keep all seed phrases and master public keys is safe places.

And it is advisable that the backups can be in this order, safe in different locations:

Seed 1, MPK 2
Seed 2, MPK 3
Seed 3, MPK 1

I saw this on a post recently and I saw it to be a good backup option for 2-of-3 multisig. The approach would be good for others m-of-n multisig if done correctly.

[NotATether]

If you can't manage a single-signature wallet, then managing a multi-signature wallet might be a bad option.

Single signature wallets are the standard wallet, and you can't use non-custodial crypto if you don't know how to manage them.

[Cruxleo]

Note: Multisig wallets are for advanced users only

Above is an excerpt from the first reply/link on this topic.

that and most of the replies here are impactive as well as frightening and as such having some aspects of red flag for me right now via my proposal.

I think I need to first get very advanced first in order to make this move. I would appreciate more leads through.

[Kryptowerk]

Tiny info on multi-sig by our OG Andreas Antonopoulos: https://www.youtube.com/watch?v=Vhedu2XD3hU
It's three years old but still valid.

Personally I love the 2-out-of-3 multisig option. 3 seed-phrases is still manageable and it gives extra security, because if one key is compromised /stolen, the funds can still not be accessed.
While at the same time if one key is LOST, you can still just use the other two keys to generate your actual wallet.
Great combination of security and feasibility.

EDIT: Important to also SAVE the master public key, otherwise restoring with able to restore your wallet with only 2 of 3 seed phrases. Thanks @hosseinimr93 for the info.

[Z-tight]

I think I need to first get very advanced first in order to make this move. I would appreciate more leads through.

Multi-sig wallet is an extra layer of security for your funds, but you have to know exactly what you are doing. Setting up any extra layer of security is kind of complicated for any newbie, either a passphrase, multi-sig wallet or setting up an air-gapped wallet; but if you learn how to do it correctly you'll not have any problem doing it.

The difficulty with multi-sig wallet is that you need to set it up in different secure devices, either an air-gapped wallet or a hardware wallet, and it is difficult for a newbie to set up a wallet on an air-gapped device. Another thing with multi-sig set up is you have many seed phrases and master public keys to back up, and you have to keep them in safe and different locations.

[hosseinimr93]

While at the same time if one key is LOST, you can still just use the other two keys to generate your actual wallet.

This is not true.
If you lose one of the seed phrases and all you have are the two other seed phrases, you wouldn't be able to recover your wallet. For generating your wallet, you will need the master public key derived from the lost seed phrase as well. To avoid such problem, you can save the backups in the way mentioned above by Charles-Tim.

[Charles-Tim]

Multi-sig wallet is an extra layer of security for your funds, but you have to know exactly what you are doing. Setting up any extra layer of security is kind of complicated for any newbie, either a passphrase, multi-sig wallet or setting up an air-gapped wallet; but if you learn how to do it correctly you'll not have any problem doing it.

The simplest among the ones you mentioned is the use of passphrase. It is not hard at all to setup. It can be an extra layer of offline security, but it may not be online security. 2FA wallet is better for both online and offline, if done properly. But to have all your keys, multisig is better for both online and offline security and safety if done properly.

The difficulty with multi-sig wallet is that you need to set it up in different secure devices, either an air-gapped wallet or a hardware wallet, and it is difficult for a newbie to set up a wallet on an air-gapped device. Another thing with multi-sig set up is you have many seed phrases and master public keys to back up, and you have to keep them in safe and different locations.

You have to setup multisig on different devices, that is correct. Setting up using airgapped devices or hardware wallet makes it more secure, but online multisig wallet too are not bad and safer than just single sig wallets.

[Findingnemo]

Note: Multisig wallets are for advanced users only

Above is an excerpt from the first reply/link on this topic.

that and most of the replies here are impactive as well as frightening and as such having some aspects of red flag for me right now via my proposal.

I think I need to first get very advanced first in order to make this move. I would appreciate more leads through.

If you feel you aren't capable of holding multiple keys on your own then there is an option that offers paid multisig setup like Casa which ensures that your keys will be will be stored in multiple places but its all based on trust which is against the nature of bitcoin since it encourages trustless system.

I will suggest you go for hardware wallets that are better than SPV wallets cause its less likely to be affected by malware and no burden of managing multiple keys.

But there are different kinds of wallets available for different user needs so pick yours based on your needs. And if you are just okay with a small amount then single signature Electrum wallet is enough along with passwords that ensure unauthorized access when device gets stole and buys you enough time to import the wallet with seeds and move the balance in that wallet to the new when the person is trying to brute-force your password.

[Agbe]

If you can't manage a single-signature wallet, then managing a multi-signature wallet might be a bad option.

Single signature wallets are the standard wallet, and you can't use non-custodial crypto if you don't know how to manage them.

Exactly. Op don't have to follow the general public for some personal decision, if he can't use such wallet. multi-signature wallet is secure and there is no dispute in it but single signature wallet is more easy to use. And if you can't manage multi-signature wallet it is better you stick to the one you are using. Well experience is the best teacher so if you want to test it, OmegaStarScream has given you the full guide to go about it. You can try it and compare the two and choose one to use. And as Charles-Tim said, you don't have to use one device but two.

[Charles-Tim]

I will suggest you go for hardware wallets that are better than SPV wallets cause its less likely to be affected by malware and no burden of managing multiple keys.

SPV wallets are wallets that are not full clients. Meaning that you do not need to download the whole blockchain before you can use them. Neither does SPV wallet needs pruning.

All hardware wallets that I know are designed in a way that they can be SPV wallets. Although, you have the option to connect some to your own node or your own server.

[Findingnemo]

I will suggest you go for hardware wallets that are better than SPV wallets cause its less likely to be affected by malware and no burden of managing multiple keys.

SPV wallets are wallets that are not full clients. Meaning that you do not need to download the whole blockchain before you can use them. Neither does SPV wallet needs pruning.

Exactly, cause I think not everyone is supposed to run their full nodes unless there is some necessity for them to do. Here in case OP just wants to have better security for his assets that are stored in a wallet like Electrum and looking to increase the security further.

But running their nodes on their own servers is mandatory for anyone who seeks the utmost privacy and is not willing to rely on third part servers.

[Z-tight]

but online multisig wallet too are not bad and safer than just single sig wallets.

It is not in itself safer than a single signature wallet set up in a completely safe enviroment. If you set up a multi-sig wallet online, with all the keys and seed phrase generated and stored online, it is easier for an attacker to steal your funds than when you use a single signature wallet in an open source hardware wallet, or when you set up your own air-gapped single signature wallet.

[Kryptowerk]

While at the same time if one key is LOST, you can still just use the other two keys to generate your actual wallet.

This is not true.
If you lose one of the seed phrases and all you have are the two other seed phrases, you wouldn't be able to recover your wallet. For generating your wallet, you will need the master public key derived from the lost seed phrase as well. To avoid such problem, you can save the backups in the way mentioned above by Charles-Tim.

Thanks for this crucial info. I edited my post to make sure no one does get the wrong idea.
Generally speaking, if anyone tries to advanced mode with a multi-sig wallet I would advice to test run their setup without crucial funds thorougly first and only then start using it for bigger amounts of Bitcoin.

[Charles-Tim]

If you set up a multi-sig wallet online, with all the keys and seed phrase generated and stored online, it is easier for an attacker to steal your funds than when you use a single signature wallet in an open source hardware wallet, or when you set up your own air-gapped single signature wallet.

Multisig wallet, with the seed phrase generated online on different devices, that is safe because it has more keys. But the wallet owner(s) must be conscious of malware. He/they must also backup the seed phrases and master public keys appropriately. If you generate the seed phrase offline, you added to its securely. Backups should be offline. Multisig is a means you can have safer online wallet setup on different devices.

[PX-Z]

I've a single signature wallet but I heard recently that the  multi-signature wallet has more security and that interests me as my stored assets increases.

Multisig wallet with the other device for signing is offline is the best way to do it.
But you should include the saving of the seed in very safe and secured manner. Because no matter how secured your devices are if your backup seed will be compromised, it's useless.

[BlackHatCoiner]

If you set up a multi-sig wallet online, with all the keys and seed phrase generated and stored online, it is easier for an attacker to steal your funds than when you use a single signature wallet in an open source hardware wallet, or when you set up your own air-gapped single signature wallet.

Yes, but if only one co-signer makes their setup airgapped, it is superior than an airgapped single-sig wallet in terms of security.

One very recommended solution for handling multi-sig wallets is SeedSigner. It lowers the cost of multi-sig security and setup of an airgapped environment. You don't have to carry abandoned computers, and the process of airgapping it is much less complex.