Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => Bitcoin Forum => Bitcoin News & Updates => Topic started by: Legacy360 on September 30, 2020, 12:44:01 AM
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I am just trying to see if I am thinking about this correctly - it seems to me that all other things being equal (physical security and such), a multisig wallet is ORDERS OF MAGNITUDE more secure than a regular wallet.
It seems vastly superior just about from any angle.
Here are my thoughts on this:
1. Obviously, if you use M of N multisig wallet where M < N (2 of 3 , 3 of 4, 4 of 6) you automatically get a failsafe in case you lose one of your keys (or master seed if you used a separate HD wallet based on new master seed derivation). With a regular wallet - if you lose the master private key and seed - you are sunk, that's it, there is no recourse. It's a single point of failure.
2. If you use different devices / sources of entropy to derive master seed phrase -such as hardware device, rolling die, software construction via strong CSPRNG library (say Electrum) - that further lowers your chances of someone brute-forcing your seed to due accidental weak source of randomness in one particular setup. 1 out of 2^256 is nearly 0 anyway, but chances of brute forcing two or three of those are even more ridiculous. The same logic in terms of lowering your risk of using a single compromised device - if you use multiple physically independent devices to generate your keys, it seems you dramatically lower your chances of being pwned.
3. If you have a 2 of 4 setup for instance - you can spend several times from the same address by using different key combinations to sign the transaction - without giving away any privacy, unlike a regular address where every new signature to spend from that address could potentially be used to brute force the private key for that address.
4. The fact that there is a threshold of keys needed to withdraw funds makes multisig more amenable to being stored relatively safely in the cloud. Someone could use Shamir's secret-sharing algorithm to split each master seed, even encrypting it, for additional peace of mind, and storing it on multiple providers' file storage - GDrive, Dropbox, self-hosting, across physical devices. In a 3 of 5 setup, you could store up to 2 seeds in such fashion - and be quite safe in knowing that even if the parties were to collude, break your encryption and assemble 2 of your master keys, that would still not be enough to steal your funds.
5.Does multisig offer more in the way of being resistant to quantum computing cryptanalysis?
What am I missing? Are there any good counterarguments to using multisig vs just a regular [hardware] wallet?
I guess for now multisig transactions are slightly larger (for the spending tx ) but that will hopefully be soon mitigated with Schnorr/Taproot, right?