Key Facts: Multisigs work like a pooled account: multiple private keys, one public key. Certain wallets take up to hours to complete a single multi-signature transaction. All bitcoin and cryptocurrency hardware wallets are capable of sending simple transactions from one address to another easily and efficiently. By simple, I mean input that requires a single signature and a single cryptocurrency receipt address to complete. But it is increasingly common to find wallets with more complex transactions, such as those that require more than one signature to be processed. In fact, it is not uncommon for bitcoin and cryptocurrency hardware wallets on the market to be capable of handling simple multi-signature transactions. Multi-signature wallets They are those that use multiple private keys for the same public key. This can be useful as a security measure for companies that manage their treasuries in Bitcoin and want each member of management to have a key to approve a transaction, or as an anti-theft protection measure in a family wallet, where each mother, father and son would have a key. Thanks to this article, you will have knowledge to choose the best wallets of this class. Simple here are 2 of 3 multisig transactions with up to 10 simultaneous balance sends (known as batch transactions), most of which complete in a matter of seconds. They are called 2 of 3 transactions because require at least two signatures out of three possible to create an output of bitcoin. The wallets in question capable of making these transactions in less than a minute are the Ledger Nano S and Nano S Plus (using Electrum), all Trezor models, the Specter DIY, the BitBox 02 and the Blockstream Jade.
Get to know the three Trezor wallet models
Trezor is an industry giant and the first to launch a hardware wallet. It has three models: Trezor Model T, Trezor Model One and the so-called Trezor Safe 3, with increased security of the EAL6+ safe element. But bitcoin and cryptocurrency transactions can be more complex, and escalate radically in difficulty (and processing time). What would happen, for example, if you wanted to generate 100 balance transfers with a 3 of 5 multi-signature wallet, all in a single transaction? Depending on which bitcoin wallet you have, as well as the state of the network at the time, This action could take hours or even be completely reversed.
Although they are not widely used in general and their potential remains to be fully discovered, multisig wallets serve important use cases. They are especially useful when collaborative money management and security is required: paying payroll, custody of mutual funds, distribution of family inheritance, etc. They are especially used by exchanges to reduce the custody risks of cryptocurrencies.
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What is the method for choosing a good multi-signature bitcoin wallet?
Not all wallets on the market are suitable for carrying out these complex transactions, which is why in this article I present the results of the test that Jameson Lopp did to choose bitcoin wallets and multi-signature cryptocurrencies.
Jameson Lopp is an American software engineer and co-founder of Casa, a bitcoin security provider focused on high-net-worth holders. The security protocol created by Casa is of a high level as it requires signing three devices to transfer assets. His main product is multisig wallets, which is why Lopp is an authority on the topic. Thanks to these results, you, the reader, and I, the writer of this note, do not need to spend money on multi-signature wallets and test them through trial and error, with all the time expenditure that this implies. We can simply choose the best one for us and buy it (trusting that the results are reliable). For Jameson Lopp, the key to a good multi-signature wallet lies in the time it takes to sign transactions. This tested the multisig wallets on the market and measured in hours, minutes and seconds the time it took to complete the transactions. He took into account only those wallets on the market which are interoperable with Electrum, Sparrow and Specter, three of the most important bitcoin wallets. The importance of interoperability with Electrum, Sparrow and Specter lies in the fact that most hardware wallets require a third-party service or functionality to host multi-signature architecture, such as Trezor and Ledger. Hardware wallets capable of doing this without external resources, such as SeedSigner, are the exception. Here are the results of Jameson Lopp's tests:
Wallets begin to present difficulties when the transaction contains around 100 simultaneous expenses. Source: Blog.Casa.io As I stated before, almost any cryptocurrency wallet is capable of handling a transaction with a dozen inputs and a multisignature divided into two of three keys. The decrease in performance of some occurs when the inputs of bitcoin to spend begin to be many. At this point, it is clear that the best are a few:
SeedSigner, the best multisig wallet
The winning wallet is the SeedSigner. Considered one of the best bitcoin wallets, the SeedSigner is a DIY project (do it yourself), a wallet that is assembled by hand at home using the appropriate materials, reducing supply chain risks. SeedSigner far outperforms other wallets in the time it takes to complete complex multi-signature transactions. It is capable of settling 10 expenses in one second and 100 in 16 seconds using both multisig 2 of 3 and 3 of 5. Without a doubt, It is the best wallet for multi-signature transactions.
Jameson Lopp assures that the wallet has a disadvantage, and it is that it is painful when it comes to scanning partially signed bitcoin transactions (PSBT), a type of transaction used mainly for offline payments. It tends to hang in the process. Another relative disadvantage of SeedSigner is that it is Bitcoin-only, and you may need a more general-purpose wallet, such as a Trezor or Ledger, to handle stablecoins or other multi-signature cryptocurrencies.
Keystone Pro and Cobo Vault, two wallets suitable for multi-signatures
The Keystone Pro and the Cobo Vault, both from the same company, are open source multi-network and multi-token wallets; in fact, they are from a pioneer firm in using this form of code. These wallets prove to be effective when processing large transactions (100 multi-signature spends 3 out of 5), taking less than 1 minute. These Keystone wallets support a large number of cryptocurrencies and include a touch screen and a more advanced firmware, similar to that of a cell phone.
Keystone Pro 3, a self-sufficient wallet
Keystone 3 Pro is a wallet that allows you to execute advanced actions from the device. It has triple secure element and PCI that guarantees instant data destruction after physical manipulation attempts. It is a self-sufficient model with an integrated battery and QR camera. It should be taken into account that configuring these wallets to accept multi-signature management of bitcoin is complicated. According to Jameson, It only achieved this with the bitcoin-only version of these wallets. An additional difficulty was presented to him: he was only able to successfully export the public keys to Sparrow and using a microSD with a .json file and not via QR code.
The BitBox02 is slow, but safe
BitBox2 is a small and discreet hardware wallet made of polycarbonate. The most notable thing about this wallet is the number of different adapters it comes with: microSD card, a USB-C type extension, a USB A to C adapter. The BitBox02 takes more than a minute to process 2 out of 3 multi-signature transactions with 100 transaction costs. bitcoin. However, it is one of the ones that scales best since it takes practically the same time to process the same 100 expenses in transactions with 3 out of 5 signatures.
BitBox02, the discreet and ready-to-use option
BitBox2 is a small, discreet hardware wallet with dual chip security; It comes with a microSD card, a USB-C type extension and a USB A to adapter. The variety of adapters it comes with make it a practical and ready-to-use option.
The Coldcard Mk4 works, but it scales poorly
The Coldcard Mk4 is a Bitcoin-only wallet. It is one of the safest and most well-known on the market. It is managed from wallets compatible with the BIP174 standard, such as Electrum or Bitcoin Core. This wallet completed the same stress test as the SeedSigner (10 multisig spends out of 2 out of 3), but in 45 seconds instead of 16. In these parameters, it is one of the best. However, its performance worsens when trying to scale to multisig transactions 3 out of 5 out of 100 expenses, exceeding two minutes of delay.
Coldcard is Bitcoin-only. Source: Coldcard Coldcard is one of the wallets that allows you to scan the addresses involved in a multisig transaction more comfortably. However, its main deficiency is its scalability.
Wallets not recommended for multi-signature transactions
We already mentioned the bitcoin and cryptocurrency wallets that Jameson Lopp's test showed as the best for multi-signature management. Before closing, it is necessary to mention those whose performance left something to be desired and are not suitable for this function. Ledger is a good general purpose bitcoin and cryptocurrency wallet brand. It has a good application from which to manage and use cryptocurrencies (Ledger Live), it has an attractive design and customer support that updates and improves services. However, they are the worst choices for a multisig wallet, taking hours to complete the processes.
Ledger Nano
Ledger's Nano The reason is not in the wallet itself, but in “inefficiencies in the way some types of wallets interact with the device,” according to Lopp. This is due to Ledger's usage policies. On the other hand, the Passport, a bitcoin-only wallet that looks like a luxury retro mobile phone and is capable of running the Lightning Network, is useless for 100-spend multisig transactions.
The Passport is also a bitcoin-only wallet. Source: Passport Jameson Lopp assures that it should run the test again with this wallet since I was using an outdated version of the firmware. For their part, the Trezor, although they are not excessively slow, do take up to 6 minutes to complete the processes; Given this performance, they should not be the first option if you are looking to manage multisignatures for complex transactions.