A Simple Method to Boost Your Bitcoins’ Security

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There’s always a lot of talk regarding how to keep your Bitcoins safe. In today’s post I want to introduce a new wallet that just became available which will drastically boost the security of your Bitcoins.

Multisig – The Nuclear Launch Protocol for Your Bitcoins

If you’ve been dealing with Bitcoin long enough you’ve probably heard the term “Multisig”. Not long ago Bitpay launched Copay – a Multisig Bitcoin wallet. But what does multisig actually mean?


Multisig addresses or multisig wallets are wallets that need the autherization of a certain amount of people in order to conduct a transaction. Just imagine this as your own personal dual confirmation nuclear launch procedure. Here’s an example:

Let’s say I want to set up a Bitcoin company with 3 other partners. You decide to open a Bitcoin account for this purpose and define that in order to withdraw funds from the wallet at least 3 out of 4 signatures are needed. This way no one can make any financial decision alone with the consent of at least 2 more people.

Sign up with Copay

Opening an account with copay is easy. For the purpose of this tutorial I’ve used the web version of Copay but there’s also an Android version an a browser extension. To begin with, just name your wallet, decide how many people will be connected to it and how many signatures it will require. It’s not recommended to use Copay without any participants.

copay signup

Invite the wallet’s participants

Once the wallet is created you will be given a secret key which you will need to send to the other participant. They will, in turn join an existing wallet and paste this secret key as their entry password. After all participants have joined you can start working with wallet (I believe you might be able to do so even before all 4 have come aboard).

copay invite users

 

It’s recommended that all participants backup the wallet and keep the backup in at least 2 different places – for example your email and a flash drive.

Why is this so important for my Bitcoins’ security ?

You can use a multisig wallet in order to prevent Bitcoin theft. In case someone hacks your Bitcoin wallet’s private key they still won’t be able to steal your Bitcoins since they won’t have enough signature to authorise any transactions. That’s why keeping you coins in a multisig wallet is a great security measure. For a detailed tutorial on how to use Copay watch the video at the top of this video.

Ofir Beigel

Owner at 99 Coins ltd.
Blogger and owner of 99Bitcoins. I've been dealing with Bitcoin since the beginning of 2013 and it taught me a lesson in finance that I couldn't get anywhere else on the planet. I'm not a techie, I don't understand "Hashes" and "Protocols", I designed this website with people like myself in mind. My expertise is online marketing and I've dedicated a large portion of 99Bitcoins to Bitcoin marketing.

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17 Comments on "A Simple Method to Boost Your Bitcoins’ Security"

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martin
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martin
Hi OFIR, I’ve been enjoying the email mini bitcoin course its quite helpful, thanks. I wonder if you can help I seem to have lost some BTC. I have 3 Electrum wallets (Number2) (did have) the BTC which was sent from another Electrum wallet (Number 1) on the same computer. Number 2 had the bitcoin which was transferred from Number 1 after the split on 2/8. Number 1 then had a zero balance. Today I created a Coinomi BTC and BCC wallet on a separate android device using the wallet-words from number 1 wallet with the belief it would credit… Read more »
michael
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michael

The multisig wallet can also be used to boost security with just one person.
You simply need 3 keys, and it takes 2 to activate.
1 key is essentially no way to guess, with 2, no one can inject a fake transaction across the blockchain trying to steal your current bitcoins by starting an alleged transaction with a guessed key.

Ofir Beigel
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Ofir Beigel

Not sure if you can create 1 member with 3 keys – will need to check this out. Have you tried this ?

optioninvestors
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optioninvestors

I suppose you could create another account for yourself (the Bitcoin alter ego) and require dual sigs from yourself but you would likely need to keep them on separate computers.

Ofir Beigel
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Ofir Beigel

Yes I guess that is possible.

buenaventura
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buenaventura

yo utilizo coinbase y me va muy bien.

Sally Benchwood
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Sally Benchwood

Good bye, stolen Bitcoins! I sure hope so because I’ve had some stolen in the past and I don’t want it happening again. It wasn’t much (I’m glad I didn’t have more in there) but it’s a horrible experience to go
through.

Sara Pialla
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Sara Pialla

I wonder, after you have, let’s say 5 members would that secret expire? I ask because if someone breaks in to your wallet, he/she can share that secret with other accomplices and they could steal the Bitcoins, couldn’t they?

Ofir Beigel
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Ofir Beigel

The secret is different for each member so if one gets hack the wallet is still safe

Sara Pialla
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Sara Pialla

Thank you for replying so fast, Ofir! This makes it even harder for someone to steal Bitcoins which is great!

Lucas Scott
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Lucas Scott

Do you know how many friends or family members you can invite to become a wallet’s participants? I guess it would be better to have more than 5-7 people in there. The more people the better the security although you would need to get consent from more people when you want to use some Bitcoins.

Ofir Beigel
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Ofir Beigel

You can have up to 12 participants and require up to 3 signatures only. The limits are imposed by the Bitcoin network.

John Wright
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John Wright

This is so simple and easy to set up! I just watched the video and it’s great how you get that secret key that you have to pass on to others in the same wallet. Great, great, great! Can’t wait to use Copay! Thank you for sharing this important news with us, Ofir!

Ofir Beigel
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Ofir Beigel

You’re welcome :)

Samuel Lopez
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Samuel Lopez

Didn’t even know something like this was in the works! I’m so happy they finally found a seemingly impossible to tamper with way of protecting Bitcoin wallets! Hopefully, hackers won’t be able to find a way around this.

Ryan King
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Member
Ryan King

I think Copay is a wonderful idea! Having to await the approval of other people from your wallet’s participants means drastically reduced chances that your Bitcoins are stolen! This could be one of the best security boosts that Bitcoins have seen yet!

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