Setup Hardware Wallet Overview
Update Your Firmware
Updating firmware is a step where things could go wrong, so we want to do this before putting any funds on the hardware wallet.
Hardware wallets by default refuse to update their own firmware unless the manufacturer has cryptographically signed the update, meaning it should be impossible for a third party to trick you into installing their “update” (malware). Still, it’s a good idea to exercise common sense and be a little paranoid here.
There are many incentives for a hacker to try to override the behavior of your hardware wallet. The good news for your multisig scheme’s security is that by requiring signatures from multiple keys (from devices manufactured by different vendors) an attacker would need to trick you into installing compromised firmware simultaneously on multiple devices.
For extra security when updating firmware via SD Card, use a unique SD card for each hardware wallet. In the unlikely even that one of your hardware wallets is compromised and is attempting to push malware on another, this will make it harder for that attack to succeed.
Use a Passphrase for Each Wallet
While this is a way to harden your security, in practice it is quite complex as users are terrible about:
- Generating strong random passwords, which by definition must be long (high entropy)
- Remembering strong passwords, especially when they’re long (and sometimes not used for many months/years)
- Implementing a secure backup/recovery system (like Shamir’s Secret Sharing Scheme)
We prefer instead to rely on the added security that multisig itself provides.
For now, this step should only be considered for expert users, and only after increasing your quorum (from 2-of-3 to 3-of-5).
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