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Known Issues: Unchained Capital

Limited Hardware Wallet Support

Unchained doesn’t support Coldcard nor Cobo Vault, although they have plans to add Coldcard in the future. This means that properly verifying a receive address is only possible for advanced users.

Unchained recently added some address verification functionality to Trezor. However, this improvement doesn’t fundamentally fix Trezor’s many known issues. As Trezor is stateless, these steps will only confirm that 1 of your keys is part of the quorum (not m of your keys are part of your m-of-n). You must repeat these steps on at least m of your devices.

Privacy Alert!

Any third party service that can participate/coordinate multisig transactions will have access to your balance and transaction history. They may be forced to share your records with multiple government agencies, and often be legally unable to disclose their compliance with requests. Of course most bitcoiners buy their coins on exchanges that follow KYC/AML procedures, so this may or may not be a factor for your use-case.

Could Reintroduce Single Points of Failure

While proper multisig allows you to have no single points of failure (see section title Why Multisig), it still requires that you take some control of your financial sovereignty. Users who rely on third-party services may accidentally reintroduce a single points of failure. For example, if a 2-of-3 service holds 1 of your keys and mails you 1 (malicious) hardware wallet they are in a trusted position as they could control a majority of your keys!

More realistically, were a multisig service provider to be hacked they might be able to exploit the trust users have for it. We’ve seen similar attacks on the popular Electrum Client for many years. This might might take the form of an invalid receive address (if using a stateless hardware wallet with limited defenses) or an invalid change address (if using a hardware wallet that can’t detect it).

Only Option is 2-of-3

3-of-5 would be better, especially when using a hosted service that already:

Evaluate Unchained Capital in Totality

This page is about known issues, not positive attributes. No setup is 100% secure.

Hosted multisig providers make multisig much more accessible/easier for less technically savvy HODLers. They will likely continue to improve over time and have an incentive to push best practices onto their users.

Some noteworthy benefits of using Unchained: