Topic Idea: multsigbackup.com #82
Description
What is the topic idea?
I recently released an open source project, multisigbackup.com, which aims to simplify the process of backing up a 2-of-3 multisig descriptor by encrypting and inscribing it on Bitcoin, so that anyone, including a loved one, can always recover it with only 2 seeds.
Explain the value
How it works
This tool strips all the sensitive data in a k-of-n descriptor (master fingerprints, xpubs) and encrypts it such that it can’t be decrypted without k xpubs. The tool then helps the user inscribe the data publicly on Bitcoin, including the descriptor template, derivation paths, and a hash of each pair of master fingerprints.
To recover, the user simply inputs two master fingerprints, which are hashed and used to find the encrypted descriptor onchain. An open source indexer makes this near instantaneous. Once the user has the encrypted descriptor, they use the derivation paths in the descriptor template to derive k xpubs, decrypt the encrypted data, and reassemble the original descriptor.
Ledger and Trevor hardware wallets are integrated into the recovery process for ease-of-use.
What attendees will learn
Attendees will learn the ins-and-outs of multisig descriptors, including the pitfalls / existing best practices when backing them up. This includes learning about master fingerprints, extended public keys (xpubs), and derivation paths. Attendees will also learn about how data can be inscribed on Bitcoin, through OP_RETURN or taproot inscriptions, and how shamir secret sharing and threshold encryption is used to create an encrypted version of the multisig descriptor. Finally, attendees will be given a walk through of how to create a multisig wallet on Sparrow, export the output descriptor, encrypt and inscribe it using this tool, and then recover using two Trezor devices.
Agenda
- Intro to threshold multisigs and multisig descriptors
- Existing best practices for backing up descriptors
- Benefits and drawbacks of inscribing descriptors on Bitcoin
- High-level overview of the project
- Deep dive on shamir secret sharing and threshold encryption scheme
- Deep dive on recovery process
- Live demonstration
- Future development