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72 Greed

Bitkey's Seedless 2-of-3 Bitcoin Wallet Design Explained

Original title: Why Bitkey Ditched Seed Phrases | Clay Garrett SLP778

Stephan Livera 59:49 5 views on YouTube
Thumbnail for Why Bitkey Ditched Seed Phrases | Clay Garrett SLP778 59:49

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Summary

Bitkey is a bitcoin wallet from Block that avoids seed phrases. It uses a 2-of-3 multisig design with an app key, a hardware key, and a Block server key. Safety here means security plus recoverability. A cloud backup can enable an instant phone swap, but it needs the hardware key to decrypt. App and hardware keys can spend without Block. If hardware is lost, a 7-day delay applies. Vendor lock-in is described as temporary, not an ethos. Multi-vendor trade-offs follow Coldcard. Recovery Contacts and inheritance are part of the recovery paths. Transfer without hardware has limits, and a $5 wrench scenario is part of the threat model. FROST is a working prototype already in the repo. On-chain, the setup can look like single-sig. Covenants could move policy on-chain. Chain code delegation is addressed by BIP 89. Privacy-conscious Electrum options, mempool, and custom servers are part of the design space. Wallet Plus free-for-life co-signing is part of the model. Bitkey's approach focuses on retaining control through multiple keys and recovery paths.

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Key points

  1. Bitkey avoids seed phrases and uses a 2-of-3 model with an app key, a hardware key, and a Block server key.
  2. Cloud backup requires the hardware key to decrypt, while app and hardware keys can spend without Block.
  3. Lost hardware triggers a 7-day delay, and transfer without hardware has limits.
  4. Recovery Contacts and inheritance are part of Bitkey's recovery paths.
  5. FROST is a working prototype already in the repo, and chain code delegation is addressed by BIP 89.
  6. On-chain the setup can look like single-sig, and covenants could move policy on-chain.

Chapters

Chapters come from the timestamps in the video description.

Questions

Does Bitkey use seed phrases?
No. Bitkey ditched seed phrases for a recovery-focused 2-of-3 design.
What happens if the hardware key is lost?
A 7-day delay applies.
Is vendor lock-in part of Bitkey's ethos?
No. Vendor lock-in is described as temporary, not its ethos.

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