Singlesig vs. multisig for securing your #bitcoin

What are the pros and cons of singlesig vs. multisig for securing your #bitcoin?Let's explore 7 methods people use to try to enhance their singlesig security... and why multisig is ultimately the best approach for your long-term savings.

Singlesignature is the most basic method for securing bitcoin, involving just one private key. While easy to set up, this model creates single points of failure—making your generational wealth vulnerable to theft and loss.

So how do people try to fix this?

Seed phrase copying: Doing this can provide extra protection against natural disasters or misplacement. But making multiple copies of your seed phrase increases the risk of theft if any copy is discovered.

Seed phrase splitting: Dividing the seed phrase into parts seems more secure, but if a thief gets a portion, they're closer to cracking the full phrase. It also makes it more difficult (if not impossible) for you as the user to get access your bitcoin if one piece is lost.

Seed phrase encoding: The more complicated the encoding strategy, the less likely a thief will be able to reverse-engineer it. But a complex encoding strategy can also increase the chances of making a mistake, or forgetting how to decode it yourself.

Multiple singlesig wallets: Distributing bitcoin across multiple wallets reduces the risk of total loss but creates more points of failure for partial loss. There are methods to remove single points of failure for your entire bitcoin balance without introducing this issue.

BIP 39 passphrases: Adding a passphrase to your seed phrase increases security but adds another critical component that could be lost. If you store a passphrase and it becomes misplaced or destroyed, your seed phrase will not be enough to regain access to your funds.

Seed XOR: This method allows you to split your seed phrase into unique phrases without the usual security risks of many approaches above. But, critically, losing any part means losing access to your bitcoin.

Shamir’s Secret Sharing (SSS): SSS splits a key into 'shares' where only a portion is needed to recreate the key, reducing the risk of loss and theft. A notable weakness: When the required shares are used to reassemble the bitcoin key, a temporary point of failure occurs.

Multisig

All of these approaches are inferior to multisig for your long-term savings. Multisig is not a singlesig modification like we’ve covered up to this point, but a fundamentally different structure for holding bitcoin.

Multisig eliminates single points of failure by requiring multiple keys to access your bitcoin. It offers robust security against both loss and theft—a balance of security and redundancy.

Collaborative custody multisig allows you to sleep well knowing you have full control over your generational wealth. It protects you from exchange hacks, external threats, and yourself.

Learn more about the nuances between these approaches to bitcoin security and how we landed at this conclusion: https://unchained.com/features/singlesig-vs-multisig

And book a consultation today if you want to pull your bitcoin from an exchange or custodian and take ownership over your wealth. You can even control the keys to Roth tax-advantaged bitcoin in a retirement account! https://unchnd.co/whynotboth