Crypto Holders Urged to Implement Multisignature Setup Against Physical Threats

Crypto holders who have life-changing amounts of Bitcoin need to think about physical threats and how to secure their funds. According to experts, a hardware wallet can protect against malware and phishing but cannot remove the authority held by the person who knows how to unlock it.

A properly separated 2-of-3 setup is recommended for technically capable holders. This means having one signing key available at home, another independently controlled key stored off-site in another city, and a recovery key held by a custody provider or carefully selected co-signer.

Jameson Lopp recommends geographic key separation because forcing access to several controlled locations increases the time and difficulty required to complete an attack. However, this design also creates ordinary failure modes that product descriptions can understate, such as keys being unavailable outside branch hours or signers moving country.