Store Large Amounts Of Bitcoin At Home Using SeedSigner

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Store Large Amounts of Bitcoin at Home using SeedSigner

Introduction

Securing large amounts of Bitcoin requires a robust and secure storage solution. One such option is a 2-of-3 multisig wallet setup using SeedSigner, a DIY, air-gapped Bitcoin signing device. In this article, we will guide you through the process of setting up a 2-of-3 multisig wallet with SeedSigner, using Sparrow Wallet as the management software.

What You'll Need

To set up a 2-of-3 multisig wallet with SeedSigner, you will need the following components:

  • Three SeedSigners: You can build three separate devices or use one and wipe it between uses. Each represents one key.
  • Raspberry Pi Zero (no Wi-Fi), camera module, and screen (per device if building three).
  • MicroSD card (8GB+), card reader, and a computer.
  • Pen and paper or metal backup (like a steel plate) for seed phrases.
  • Sparrow Wallet (free software) on your computer for managing the multisig setup.
  • A USB drive or SD card for transferring files (air-gapped).

Option 1: Using One SeedSigner (Wipe Between Uses)

This option is simpler and cheaper but requires careful seed management.

Build Your SeedSigner

To build your SeedSigner, you will need to:

  • Get a Raspberry Pi Zero, camera module, and display (check SeedSigner's GitHub for exact parts).
  • Download the latest SeedSigner software (e.g., v0.7.0 as of now) from their official GitHub.
  • Flash it to your microSD card using a tool like Balena Etcher on your computer.
  • Assemble the Pi, plug in the camera and screen, and boot it up with the microSD.

Generate Three Seed Phrases

To generate three seed phrases, you will need to:

  • Boot SeedSigner, go to “Seed” > “Create Seed” > “24 Words” (for max security).
  • Write down the 24-word seed phrase it shows on paper or metal. Label it “Key 1.” Keep it secret and safe.
  • Go to “Seed” > “Export as SeedQR,” scan it with your phone or save the QR code image on a USB drive.
  • Shut down SeedSigner, remove the microSD, and reflash it with the software to wipe it clean.
  • Repeat this process two more times to create “Key 2” and “Key 3,” wiping the device each time. You now have three unique 24-word seeds.

Set Up Multisig in Sparrow Wallet

To set up multisig in Sparrow Wallet, you will need to:

  • Install Sparrow Wallet on your computer (download from sparrowwallet.com).
  • Open Sparrow, click “File” > “New Wallet,” name it (e.g., “My2of3”), and select “Multi Signature” (2-of-3).
  • For each key:
    • Go to SeedSigner, load a seed (e.g., Key 1) via “Seed” > “Load Seed” > scan its SeedQR or type it in.
    • From SeedSigner’s main menu, select “Export Xpub” > “Sparrow” > show QR code.
    • In Sparrow, click “Add Device,” select “SeedSigner,” and scan the QR with your computer’s webcam.
  • Repeat for Key 2 and Key 3, wiping SeedSigner between each (or use saved QR images from the USB).

Back Up Everything

To back up everything, you will need to:

  • In Sparrow, go to “Settings” > “Export” > “Output Descriptor” and save this file (it’s your wallet blueprint).
  • Store each seed phrase (Key 1, Key 2, Key 3) and the descriptor in separate, secure locations (e.g., safe, bank vault).

Test It

To test your setup, you will need to:

  • Send a tiny amount (e.g., 0.001 BTC) to the multisig address from Sparrow’s “Receive” tab.
  • To spend, create a transaction in Sparrow, export it as a QR, sign with SeedSigner loaded with Key 1, then wipe and sign with Key 2. Broadcast via Sparrow.

Option 2: Using Three SeedSigners

This option avoids wiping but costs more (three devices).

Build Three SeedSigners

To build three SeedSigners, you will need to:

  • Assemble three separate SeedSigner devices as above, each with its own Pi, camera, screen, and microSD flashed with the software.

Generate One Seed Per Device

To generate one seed per device, you will need to:

  • On SeedSigner 1, create a 24-word seed, write it down as “Key 1,” and export its SeedQR.
  • On SeedSigner 2, do the same for “Key 2.”
  • On SeedSigner 3, do the same for “Key 3.”

Set Up Multisig in Sparrow

To set up multisig in Sparrow, you will need to:

  • Same as above: open Sparrow, create a 2-of-3 wallet, and add each device’s xpub by scanning their “Export Xpub” QRs one at a time.

Back Up

To back up, you will need to:

  • Save the Output Descriptor from Sparrow and store each seed phrase separately with its device number.

Test It

To test your setup, you will need to:

  • Send a small amount to the wallet, then sign a transaction with any two of the three SeedSigners.

Signing a Transaction (Both Options)

To sign a transaction, you will need to:

  • In Sparrow, go to “Send,” enter details, and click “Create Transaction.”
  • Export the unsigned transaction as a QR code.
  • Boot SeedSigner with Key 1, scan the QR, verify details, sign, and save the signed QR to USB.
  • Repeat with Key 2 on a wiped SeedSigner (Option 1) or second device (Option 2).
  • In Sparrow, import both signed QRs and broadcast the transaction.

Tips for 100k+ AUD

To secure large amounts of Bitcoin, you should:

  • Diversify Storage: Keep Key 1 at home, Key 2 in a bank vault, and Key 3 with a trusted family member.
  • Add a Passphrase: On SeedSigner, you can add a custom passphrase to each seed for extra security (write it down separately).
  • Practice First: Test with small amounts until you’re comfortable.
  • Stay Air-Gapped: Never connect SeedSigner to the internet or type seeds into a computer.

This setup gives you a secure 2-of-3 multisig wallet. With one SeedSigner, it’s cost-effective but takes more steps. With three, it’s faster but pricier. Either way, you’ve got no single point of failure—perfect for big holdings.
Store Large Amounts of Bitcoin at Home using SeedSigner: Q&A

Introduction

In our previous article, we explored the process of setting up a 2-of-3 multisig wallet with SeedSigner, a DIY, air-gapped Bitcoin signing device. In this article, we will answer some frequently asked questions about using SeedSigner for storing large amounts of Bitcoin.

Q: What is SeedSigner and how does it work?

A: SeedSigner is a DIY, air-gapped Bitcoin signing device that allows you to securely store and manage your Bitcoin private keys. It works by generating a 24-word seed phrase, which is then used to create a public key. This public key is then used to sign transactions, allowing you to send and receive Bitcoin securely.

Q: Why do I need a 2-of-3 multisig wallet?

A: A 2-of-3 multisig wallet provides an additional layer of security by requiring two out of three signatures to authorize a transaction. This means that even if one of the SeedSigners is compromised, the other two can still prevent unauthorized transactions.

Q: How do I set up a 2-of-3 multisig wallet with SeedSigner?

A: To set up a 2-of-3 multisig wallet with SeedSigner, you will need to:

  • Build three SeedSigners (Option 1: Using One SeedSigner, or Option 2: Using Three SeedSigners)
  • Generate three seed phrases, one for each SeedSigner
  • Set up multisig in Sparrow Wallet, adding each SeedSigner's xpub
  • Back up each seed phrase and the descriptor in separate, secure locations

Q: How do I sign a transaction with SeedSigner?

A: To sign a transaction with SeedSigner, you will need to:

  • Create a transaction in Sparrow Wallet
  • Export the unsigned transaction as a QR code
  • Boot SeedSigner with the first key, scan the QR, verify details, sign, and save the signed QR to USB
  • Repeat with the second key on a wiped SeedSigner (Option 1) or second device (Option 2)
  • Import both signed QRs in Sparrow Wallet and broadcast the transaction

Q: What are the benefits of using SeedSigner for storing large amounts of Bitcoin?

A: The benefits of using SeedSigner for storing large amounts of Bitcoin include:

  • Security: SeedSigner provides an additional layer of security by requiring two out of three signatures to authorize a transaction.
  • Air-gapped: SeedSigner is air-gapped, meaning it is not connected to the internet, reducing the risk of hacking and unauthorized access.
  • Cost-effective: Option 1: Using One SeedSigner is a cost-effective option, while Option 2: Using Three SeedSigners provides a faster and more secure solution.

Q: What are the risks associated with using SeedSigner?

A: The risks associated with using SeedSigner include:

  • Seed phrase loss: If you lose your seed phrase, you will lose access to your Bitcoin.
  • Seed phrase compromise: If your seed phrase is compromised, an attacker may be able to access your Bitcoin.
  • Device failure: If one of your SeedSigners fails, you may lose access to your Bitcoin.

Q: How do I protect my SeedSigner and seed phrases?

A: To protect your SeedSigner and seed phrases, you should:

  • Store seed phrases securely: Store each seed phrase in a separate, secure location, such as a safe or bank vault.
  • Use a passphrase: Add a custom passphrase to each seed for extra security.
  • Keep SeedSigners air-gapped: Never connect SeedSigner to the internet or type seeds into a computer.
  • Practice first: Test with small amounts until you’re comfortable.

Conclusion

Using SeedSigner for storing large amounts of Bitcoin provides an additional layer of security and peace of mind. By following the steps outlined in this article and taking the necessary precautions, you can ensure that your Bitcoin is secure and protected.