BitBox introduction: Part 5 of 5
Know that the BitBox is with you all the way, even when your holdings become larger. Let's look at some optional improvements for security and privacy.
This is already the fifth and final email. Let's close this introductory series with an outlook how you can improve your setup if the amount secured with your BitBox becomes bigger. These options are probably not relevant right now, but they will be available once you need them.
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Added security with a multi-signature wallet
Have you ever heard of the dreaded "five dollar wrench attack"? The BitBox02 is designed to protect your keys against remote attacks and physical theft, but what if you are simply forced to unlock the wallet?
In a scenario like this, your funds are safer if you yourself cannot access them immediately. Of course, you can store the BitBox02 in a safety deposit box, but then you can't securely generate new receive addresses.
Personal multisig: increase resilience
A multi-signature (multisig) wallet can help protect against the $5 wrench attack:
- Create a new multisig wallet with multiple BitBox02, e.g., three devices.
- Define how many BitBox02 need to sign each transaction; a typical value is two.
- Keep the devices at different locations.
It's no longer enough to have a single BitBox02 to access the funds, even if it is fully unlocked!
The example above gives you a "2-of-3 multisig wallet": you have three devices stored in separate, not easily accessible locations (e.g., one at home, one at work in a locked drawer, and one with a trusted person). You can securely receive bitcoin with every BitBox02. But to spend your bitcoin, you must sign the transaction with two BitBox02, e.g., one at home and one at work.
Business multisig: enforce joint signatures
No single employee should have direct access to your bitcoin treasury if you run a business. A multi-signature wallet helps against potential "take the money and run" situations. Every outgoing Bitcoin transaction needs to be verified and signed by multiple employees, increasing the overall security of the company setup considerably.
How to create and use a multisig wallet
For Bitcoin multi-signature wallet, you need a software wallet specializing in this feature. We have published multiple guides for our favorite options:
- Electrum: the OG power-user wallet (with an adorable 90's look :)
- Sparrow: a robust and transparent wallet for the curious
- Specter: a dedicated multisig wallet with a built-in Bitcoin node
Rest assured that your Bitcoin keys never leave the BitBox02. The software application is simply the user interface that talks to the Bitcoin network.
Increase privacy with your own Bitcoin node
A hardware wallet like the BitBox02 is excellent for security, but what about privacy?
At Shift Crypto, we go to great lengths to avoid collecting sensitive data, but one thing remains: the wallet needs to talk to a server that is in sync with the Bitcoin blockchain.
By default, the BitBoxApp uses the Shift Crypto servers to fetch and broadcast your Bitcoin transactions. Some sensitive data is inevitably shared. No secrets, of course; these never leave the BitBox02, but general information about your addresses and transactions. We do not log any of that data, but you should not need to trust our word on that.
We encourage advanced and privacy-minded users to connect the BitBoxApp to their own Bitcoin full node. A full node is a Bitcoin client that downloads and verifies the Bitcoin blockchain and directly communicates with other Bitcoin peers.
Check out our BitBox Knowledge Base for more information on how to run and connect to your own full node.
That's it; now you're a BitBox02 pro! Thank you for your time and interest. We put a lot of thought and effort into our BitBox products, and it's fantastic to see that we are building something you enjoy.
A token of our appreciation: save 5% on your next order with this discount code
Use code BE12F for your 5% discount
Not planning to use it yourself? Feel free to send it to a friend who could use some nudging to take their coins off an exchange ;-)
Take care and keep your coins safe!
Jo & the BitBox team