Bitcoiners Flee Single-Sig for Multi-Vendor Multisig as Coldcard Bug Exposes Entropy Risk

In the wake of the Coldcard entropy bug, Bitcoin self-custody advocates are reevaluating their approach to securing private key pairs. The bug, which has been present since at least 2021, highlights the risks associated with relying on a single hardware wallet manufacturer.

A recent threat model analysis suggests that users should consider multiple vendors when generating private keys for multisig wallets. This approach minimizes dependency on any one manufacturer and reduces the risk of entropy failure.

One example of a multi-vendor multisig setup is using a Trezor Safe 7 hardware wallet with one key, a second key generated by a Ledger Nano, and a third key generated by a multisig wallet provider. This configuration requires any two valid signatures out of the three possible signatures to result in a valid withdrawal.

The use of multi-vendor multisig wallets has become increasingly popular among Bitcoin holders, particularly those who have experienced losses due to user error or hardware manufacturer errors. While every individual's threat model is unique, the consensus is that multisig setups offer a more resilient solution for securing private key pairs.