When your holdings grow, one sheet of paper can feel like too much risk. This guide covers the main ways to remove that single point of failure. It is part of Crypto secrets. Please make sure that you are comfortable with basic backups first.
How 2-of-3 multisig works
Key 1
At home
Key 2
At work
Key 3
With family
Multisig wallet
Any two signatures move the funds
The main tools
- Multisig needs several keys to approve a transaction.
- Shamir backups split your backup into shares.
- A passphrase adds a second secret.
Compare them
Design your layout
Geographic distribution shows how to spread keys or shares, so that no single fire, burglar or trip can defeat you.
Specialist techniques
- Generating a seed with dice removes your reliance on a device's randomness.
- Encrypting a seed backup has real risks, and the alternatives are usually better.
The rule of advanced setups
Complexity is itself a risk. Many people lose funds through their own overly clever setups. Practice each step with a small amount, write down your procedures, and make sure that your family can follow them.