Multisig Wallet Security Tips

Multisig requires multiple keys to spend funds, eliminating a single point of failure. "Multisig, short for multi-signature, means a wallet that needs more than one key to approve a transaction."

You need all public keys and a threshold of private keys to spend. "Biggest pitfall of multisig, to spend from an m of n wallet, you need m private keys and all n public keys (plus a passphrase, if you set one up)."

Multisig transactions are larger and incur higher fees. "Multisig transactions have more fees as well. They are simply bigger."

Use diverse hardware wallets from different vendors for each key. "Use 3 different hardware devices, else what’s the point? If ledger is compromised even with multi Sig it will be coldcard all over again."

Store each seed phrase and the multisig wallet descriptor in separate, secure, and geographically dispersed locations. "Keep each signer’s seed separate, but also preserve the wallet configuration/descriptor: threshold, participating xpubs, key origins and derivation paths, and script type."

Never digitize your seed phrases. "Never upload your private 12-24 word mnemonics to the cloud or even type them into your PC/phone password manager or email or photo roll. These must never exist in digital form outside of your hardware wallet."

Conduct small test transactions and recovery drills before committing significant funds. "Always do small test transactions in and out of the multisig first. Be familiar signing with all 3 devices."

Simulate loss scenarios to ensure you can recover funds with the remaining keys. "Practice "worst day” drills: simulate loss of one key and spend with the remaining two. Then simulate loss of two keys and confirm you cannot spend."

Verify receive addresses on your hardware wallet screen for every transaction. "Always compare the receive address and transaction details on the Ledger screen, not just in the app."