Cold-Wallet Security System (Multi-Share + Passphrase)
I have designed a security architecture for my cold wallet management and would like to have it audited for potential security vulnerabilities.
I intend to use a Trezor Safe 7, utilizing the advanced security features Multi-Share (Shamir Backup: 3 shares | 2/3 threshold) and a Passphrase.
The setup is as follows:
- I generate a 20-word seed phrase as a Single-Seed option via SLIP39.
- I then transition from Single-Seed to Multi-Share. After this, I possess both my original Single-Seed phrase and my three shards for the Multi-Share recovery.
- I apply a Passphrase. Whether I perform a recovery via the Single-Seed phrase or the Multi-Share variant, the passphrase is required to access the corresponding wallet.
- I distribute the three shards at three secure locations using Trezor 'Keep Metal' devices. Inside each 'Keep Metal', I include a physical note containing the passphrase.
- I keep the Single-Seed phrase at my home.
I see the following advantages:
- Redundant Recovery: Multiple recovery paths via both the Single-Seed and the Multi-Share variant.
- No Single Point of Failure (SPOF): This applies to both the seed phrase and the passphrase, as the latter is stored three times (once per shard location).
- Protection against Social Engineering and Wrench Attacks: Since the passphrase required to move funds is not stored at home, this prevents immediate forced transfers.
Disadvantages:
- Increased Complexity and Cost: A more demanding system with higher expenses for multiple 'Keep Metal' devices.
- Error-Prone Setup: Generating the seed phrase and stamping it into metal is time-consuming and prone to mistakes (a total of 80 words must be recorded and stamped).
- OpSec Risks: Concern that the security measures are disproportionately high, potentially causing operational security errors rather than increasing actual safety.
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