How To Use Multisig Bitcoin Wallets With Electrum

published on August 1, 2020

Wasabi wallet unfairly private securing your bitcoin is important and many opt to do this utilizing a hardware wallet which is a dedicated device to hold the keys to your money entirely

Offline now some take this a step further and require multiple devices in order to approve and move funds this is called a multi-signature scheme

You can do this with a variety of hardware wallets and an example of this would be if you had three devices and you require at least two of them to approve and move a transaction

By keeping these devices geographically apart it makes it much more difficult from a physical attacker to take your funds today we're going to take a look at how to set up a

Multi-signature scheme using a variety of hardware wallets and the desktop electrum wallet i'm ben with the btc sessions and this is your daily session

Huddle that bitcoin before we dive in i do want to give a shout out to sponsors of the show leddenio this is where you can use your bitcoin for a variety of different services

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Show so i have my hardware wallets ready here on my desktop now if you are unfamiliar with any of these devices i do have a full tutorial for each of them as well

As the wallet on my phone that i'm going to be using as well as electrum desktop wallet i've got tutorials for all of them so if you're unfamiliar with any of this

Feel free to go back to those videos i will link them in the show notes as well but i have the ledger nano s here though the ledger nano x will function much the same i also have shift kryptos uh

Digital bit box or the big bit box o2 i suppose it would be called and then one of my favorite hardware wallets here i've got the cold card this is the mark ii um but there is a mark iii at the time

Recording this i just don't have one of those yet also just note you hardcore cold card fans out there um i will be using a regular wired connection for this video just to i'm mostly for

Brevity's sake and to simplify the video as much as possible but this is definitely possible using psbts or partially signed bitcoin transactions where you don't actually plug it in

And you just use the sd card slot if you're curious about that also do check out my regular cold card tutorial video so where you can see those in action but i will not be utilizing that for this video

And just note that some other possibilities of hardware here at the time recording this you could also use a trezor you could also use the kobo vault as well so those are just some other options this

Is just what i have available available to me right now at the time of recording so let's dive in and get setting things up so i am here with electrum open

And what you're going to want to do is you're going to be creating a new wallet so to do so all you need to do is actually just create a name of a wallet that doesn't already exist so in this instance i'm going to just

Call it multisig test and i'm going to hit next and then i'm going to choose multi-signature wallet next and then this is where you're choosing your setup how it's going to

Work so what it's saying is the number of uh the number of devices i suppose that you're dealing with so um and how many signatures are required

So i'm going to say that i have three devices which i do and i need two signatures from them okay so you know you you want more than one obviously otherwise what are you doing

Why are you even bothering with this you could require all three but then that puts you at the risk of if you lose one of these devices you're just out of luck okay um and it says here to be able to restore a

Multi-sig wallet you should include the master public key for each cosigner in all of your backups so that means uh with all of these devices you can get the master public key um you can derive that from

The backup so the the uh the backup seed the 12 or 24 words that you use to back up all these devices when you first initialize them so just keep that in

Mind you do need information about these wallets as i said previously you need to essentially have all three of these wallets if you lose the backup file so keep that in mind

As i said as well all of these devices have already been initialized if you are unfamiliar with these devices and how to use them or if you're just using three of the same whatever you need to do

Go back and look at the tutorial videos that i have for each one of these and they will help you along the way along with any other options that you may be throwing in here okay so anyways we've

Got three cosigners requiring two signatures to move funds i'm going to hit next and then it's going to say add cosigner one of three do you want to create a new seed restore

A wallet using an existing seed okay so the option here that we're going to choose is use a hardware device we're going to hit next and now at this point the reason it's showing that it's not

Detecting anything is you actually need to initialize the device before moving ahead so with something like the ledger what you would need to do is

You need to put in your pin code and you need to open the bitcoin app so i'm just going to do my pin code off screen here so i'm quickly putting that in okay so i put in my pin and i need to

Select bitcoin and now it opens up the app at this point i can actually hit next in electrum and it should detect yep it sees ledger nano s

And i hit next there now we're going to choose the type of wallet native segwit i like to use because it is the most efficient way of using the bitcoin network and incurs the least fees so i'm going to hit next

There now at this point it will show the master public key now i'm not sure here why it doesn't do this for the other wallets once i i've gone through this process before it does not do this

For the other wallets but it does it for the first one if you want to save this you can otherwise again with the backup seed then you you should be fine if you've initialized

It and kept a backup of your ledger anyways so we'll move on okay now it's asking for number two of three so what i'm going to do is i'm going to actually unplug my ledger

We're now going to take the bit box we're going to plug that in again this device was already previously initialized and i'll try and get in closer so you can see what i'm doing okay

And so on screen i'm going to choose a hardware device and hit next it detects the bit box because it's plugged in and at this point it's going to require me to put in my password so i will go

Ahead and do that off screen okay and once again i will choose the same layout native segwit and we'll hit next and now it's asking for the third key so

At this point i'm going to unplug my bit box though i guess i wouldn't need to if i have enough connections available but i'm going to plug in my cold card okay

It's gonna ask for my pin and once i put that in a couple times and verify then we will be off to the races just do that off screen okay so my device is initialized all

Logged in and everything so i can go ahead and choose hardware device hit next it sees the cold card right away hit next same setup native segwit hit next

Now at this point uh you're going to you can encrypt the wallet file uh if you don't want to encrypt it you don't need to basically again this won't prevent people

From uh necessarily spending your money because they can't spend it with just the file but it's more so that people cannot see what you have even in the first place if they don't have the password

Okay uh for the purposes of this video and again just for brevity's sake i'm not doing a password but uh never too bad of an idea to do this as long as you can remember the password if you can't

And you lose the original file and for some reason you don't have access to one of the devices it could spell trouble so if you feel it's too much for you and you're gonna start forgetting things then then maybe

Not but it's again totally personal preference so we'll hit next there and sorry i've got two screens here okay and we're good to go so right now it sees that my bit box is not

Connected i obviously some people have limited connections try to connect again no i don't need to right now no i don't need to right now and the cold card is connected so you can

Actually see the three one two three wallets associated with this particular wallet right here and uh and yeah so we've got everything set up now so we can now receive and then eventually send

Funds so how are we gonna do that again i've got a full electrum wallet tutorial i won't go too deep into this but you see your send and receive options up here as well as any coins that you may have

So if we hit receive uh what we can do is if you want to hit a description for it you can you can request a specific amount basically create a request or you can just

See a a qr code without filling out any of that information it will create a brand new qr code for you it will also let me just create make this window

Bigger here um you can also see the address here by clicking on it and copying it so you can copy and paste this address and uh send to it however you like or have somebody send to it

Or you can scan the qr code with a mobile wallet so what we're going to be doing is we're going to be utilizing something called blue wallet so this is this is a wallet that i

Regularly use on my mobile device so i've got some bitcoin in here so all i'm going to do is i'm going to hit the send button i'm going to hit scan or i could have

Pasted in an address if it had been sent to me but i'm going to hit scan which will open up my camera i can now scan this on the screen and i'll just confirm some of the digits here

And cross-reference uh from what's on the screen there one second okay looks to be in order with me and so now i'm going to send a certain amount of bitcoin to this wallet so um

I guess we will send a 001 bitcoin okay um now it appears that fees today are a tad that high uh so i will again i'll i'll do it for the people i'll take a little bit of a hit here

That's okay um good to demo and i don't want to be spending all day waiting for this video to get done so we'll send that off and okay if you're feeling generous drop me a lightning network tip after this

Video to recoup some of these fees uh we'll send it off good okay so that is sent we should momentarily get a notification that we've uh received

Some funds okay we can actually see right here pops up it says paid if i go into coins i can see incoming bitcoin i can see the amount in satoshi's because i've said it such but

If it were set to bitcoin as my denomination i would say 001 but for now it says uh 1 million satoshi's which is the way i like to see it

Once i'm able to i will be able to uh send those funds as soon as they are confirmed okay so right now uh we're just waiting for a single confirmation on the bitcoin network

And then we'll be good to go so we'll be back when that happens okay we are back and our funds are confirmed so what we're gonna do is we're gonna go and send them out now we can do this a

Couple different ways we could go to coins we can select it and go spend or we can just go to the send screen as per usual we need to plunk in an address and we need to plunk in

An amount and we need to start sending off the transaction so what i'm going to do is i'm going to pull up my blue wallet here i'm going to hit receive and this brings up my qr code

I could tap to copy this address and send it in some way shape or form to get somebody to send to it or just in electrumul i can go to the camera icon that will open it up and

Scan like so and so we've got the address on the screen and that matches the one here okay so we're done with blue wallet what we're going to do now is we're going to we're going to send out the max

Amount and uh that looks all good to me um now if we hit pay it's going gonna bring up uh our transaction now you can adjust uh the fee here and since i'm not too

Worried about the outgoing amount then i'm happy to change it uh okay so everything looks good i dropped my fee a little bit because i'm not really in a huge rush for this

To go through i'm gonna hit finalize okay and again it gives us a breakdown of our transaction there's the transaction id the size of it um we have replaced by

Fee so if it's taken too long i can always bump the fee if need be and yeah that's about it we have our inputs and outputs where it's coming from where it's going and we can now go ahead and hit sign

So at this point i've already got my cold card plugged in and it says it's asking me if i want to create a new multi-sig wallet uh by scrolling down it'll give you more

Information about what it would be it's telling me it's two of three so and so forth i'm not going to go through the details here but in all uh you know i encourage you to take a look at it before you send it

Off but i've looked at it previously before i set it up i can just hit check to approve okay it saves it and now it's asking me okay is it okay to send this you're sending this much to the

Following address i can check that on the screen to make sure it looks all good and it'll tell me the fee all of the information i need to it's basically okay to approve x to cancel so i'm going to approve it

Signing okay now it says please insert your ledger uh if i said no here it would default to the uh the bit box but i am gonna use the ledger here so i'm just gonna unplug

The cold card we're done with that we've signed the transaction and approved it there so now i need to plug in my ledger and i need to put in my pin code and open the bitcoin app so i will do that

Right now and the bitcoin app okay application ready and uh we'll just say do you want to connect again just hit yes okay and now it shows uh i can review

The transactions so this amount is going to be going to the following address and i check that on the screen it seems to be correct uh and that shows the whole address so i

Can scroll through is that okay i'm going to accept it and then the fees accept and send with both buttons okay so that's now signed we have two we have uh

Two signed it says this is not blanked out but we need to do one more thing we need to hit broadcast so that will actually send it to the bitcoin network uh if you just close this it's not gonna

Send anywhere okay so or you can save it for a later date if you need to but we're going to hit broadcast payment sent okay and now we can close this out and we can see that the payment sent out

Has been paid if we go to our coins there's nothing there we got our history we see the money coming in and the money going out but it is unconfirmed if i go to my blue wallet

I can now swipe down and i see an incoming transaction for the amount that i sent out so we have now successfully received and then sent out money from our multi-sig wallet

Using uh i mean it was set up with the cold card ledger and the bitbox o2 but we only required two of those devices to send it out i could have done it in any combination i please called card and ledger

Ledger and bitbox bitbox and whatever i wanted or if you had three of the same device same exact effect you're utilizing multiple devices to send

Out and approve a transaction now i want to show you one other thing uh in relation that is very important that you should do this is your backup okay so what we do

Is we go file we hit save backup and uh you choose where you want that to go so i'm just going to put it on my desktop i'm going to hit open

And i'm going to hit ok ok now uh you can't see this because it's not it doesn't show on this particular desktop here but i now have a file on my desktop so maybe i'll open the

Finder so you can uh see it but okay on my desktop folder i have the multi-sig test backup and so if something were to happen

To the actual wallet file stored on my computer i could utilize this file to open uh to actually open my wallet that i previously created so what i'll do right now

Is i'll actually delete this wallet here multisig test i'll just move that to trash hell i'll even move this temporary one to trash okay so at this point i'm going to close

Electrum obviously it gives me a a problem it gives me an issue here an error because the wallet file is trying to reference this has been deleted in the middle of using it

Okay so now if i open up electrum fresh it's it's not going to know what wallet i want to use right uh and if i open that i no longer have we'll just pretend this isn't here again

Move it to trash okay so we'll just pretend that's not there so what i need to do is if i go to desktop and i could use this on an sd card whatever i want but by clicking and using that backup

And opening it and hitting next it will now open my wallet file that i previously had again my uh my devices are not connected or rather the bit box is not connected the cold card is not connected however

Currently the ledger is connected so that one shows up and again we can see the transactions we'd previously done we can see the wallets associated with it down below

Um and we would have all the same functionality of sending and receiving as we did before assuming we still had at least two of the three devices if we did not have this backup file

And our computer got corrupted something like that we would need all three devices in order to recover this multi-signature wallet to effectively create it again so please do

Keep that in mind um as you're playing with this thank you guys so much for watching uh as always if you're here on youtube please do hit like

Subscribe and share all of those things really do help so please do them if you want to hit me up on other platforms i do stream to facebook live to twitter via periscope i'm also on twitch and d live you can

Find me a variety of places and for the news videos that i do if you didn't know i do news as well uh you can find me on those all those platforms as well as audio only on the podcast which can be found

Basically everywhere spotify apple google all those places um if you want to help out the show in another way as always you can hit the sponsor latin down below uh you can also grab any of

These hardware wallets mentioned uh in the links below and doing so may help out the show or give you discounts there's a whole bunch of different stuff down there i will also include as i said tutorial

Videos to everything that we used here uh every hardware wallet the desktop wallet the wallet on my phone everything will be down below so do

Check that out if you're missing pieces of the puzzle um as always again thank you guys so much and if you really liked what you saw or if you want to help me recuperate some

Of those bitcoin fees that i paid in making this video you can always hit me up with a bitcoin lightning network tip at my tip and dot me page that is tippin t i p p i n dot

Me slash at btc sessions have a great evening a great day wherever you are and i'll see you next time for your daily session

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