Mining Lab · Coinovo Academy · Self-custody in practice
From the first key to inheritance
Theft, loss and forgetting. Most people guard only against the first and then lose everything to the second or third. Every good solution has to help against all three, and most mistakes consist of fighting one threat at the cost of another.
It keeps the private key in a chip that never releases it. Signing happens inside the device, and only the finished signature goes out. An infected computer can do nothing with that.
The key never leaves the device, that is the whole point.
An infected computer can swap the recipient address before it goes for signing. That is why the device shows it on its own screen, and that is where you have to compare it, not on the computer. Skip that step and you bought the device for nothing.
Always check the address on the device, never on the computer.
The device is replaceable, the words are not. They belong on something that survives water damage, in a place you will not lose together with the device. No photo, no cloud, no text file: all three end up on somebody else's computer eventually.
A single copy in one place is a total loss if that place burns. Two places, physically apart, are the minimum. If you like, split the words into parts, each useless on its own.
A backup never tested is a hope. Use the written words once to set up an empty wallet on a second device and check whether the same first address appears. That is the only proof the words were written down correctly.
Untested backups fail exactly when you need them.
An extra word stored nowhere yields a second wallet. Whoever finds the twelve words then sees only what is visible without the passphrase. Forget it and everything is gone; the ridge is narrow here, and anyone using one needs a plan for it just as for the words.
With multisig a payment needs several keys, say two of three. One stolen key is then not enough, and neither is one lost. The price is effort: more devices, more backups and a procedure that whoever handles it later has to understand too.
With multisig several keys sit in several places and a payment needs more than one of them. The usual shape is two of three: one at home, one in a bank box, one with a trusted person or a provider.
What that covers: a burglary at home takes one key, and one is not enough. A house fire destroys one key, and the other two still work. Covering both at once is why multisig exists at all: with a single wallet you have to choose between protection from theft and protection from loss.
What it does not cover: forgetting. Anyone who has not written down where the three keys are and how they belong together has three problems instead of one.
Multisig costs effort, and that is the most common reason it goes wrong. You need not only the keys but the description of the wallet: which keys, in which order, which derivation. Without that description all three keys are useless.
That description is not a secret. It may and should be copied several times, ideally alongside each individual key. Anyone who backs up only the keys and leaves the description inside the software has nothing precisely when the software no longer exists.
The honest recommendation: multisig pays off at amounts where you will genuinely put in the effort and rehearse it once a year. Below that, a well-secured single wallet with two separate copies of the words is the better procedure, because you will actually keep it up.
If only you know the words, the coins go with you. A sealed set of instructions with a notary or a trusted person is not a security leak, it is the difference between wealth and loss. The instructions must be written so that someone who knows nothing about Bitcoin can follow them.
Custody without a succession plan is only half the work.
Against physical threat no technology helps, only not telling people what you hold. And the larger the amount, the more a plan belongs discussed with someone who does this for a living. A learning module can explain the procedures; responsibility for your own solution stays with you.
Tasks, shifts and the daily hunt, plus an account that shows what has added up.
Opens straight away. No account, nothing to install.