21wiki position
Updated after the COLDCARD random number generator incident of July 2026, in which a firmware build defect silently routed seed generation to a software fallback generator, collapsing the entropy of every seed created on affected devices. Pending an independent audit report, this wiki does not consider that vendor’s devices trustworthy for new wallets.
Devices are listed below as engineering examples, not as purchase recommendations.
The Core Principle
“Not your keys, not your coins.” If a third party holds your bitcoin, you have an IOU, not bitcoin. The bankruptcy of FTX, Mt. Gox, Celsius, and others illustrates this. Self-custody is not advanced — it is the point.
Seed Phrases (BIP39)
A 12- or 24-word seed phrase (mnemonic) is the master key to your bitcoin. All addresses and private keys are derived from this single seed using a deterministic algorithm (BIP32/44/49/84).
Critical rules:
- Never enter your seed online (no photos, no cloud storage, no typing into any website)
- Store offline, physically (metal plate, fireproof safe)
- Store redundant copies in different locations
- The seed is everything — whoever has it, has your bitcoin
Those rules protect the seed’s storage. A seed has a second vulnerable moment that they do not touch: its creation. The words are a recording of a random number, and if that number was predictable when it was drawn, flawless storage saves nothing — the words, the fingerprint and the addresses all look entirely normal either way. See the hardware wallet section below.
Source: Seed Phrases, Seed Security
Passphrase (25th Word)
An optional BIP39 extension: add an arbitrary passphrase to your seed. This creates an entirely different wallet tree. Benefits:
- Protection against physical seed discovery (attacker finds your seed words but not the passphrase)
- “Plausible deniability” wallet: keep a small decoy amount on the no-passphrase wallet
Warning: Passphrase loss = permanent funds loss. Store separately from the seed words.
Source: Passphrase Guide
Hardware Wallets
Hardware wallets are dedicated signing devices that keep private keys off internet-connected computers. The private key never leaves the device; transactions are signed on the device and broadcast via an airgap or USB.
| Device | Security Model | Notable Feature |
|---|---|---|
| Coldcard | Airgapped (microSD), two secure elements | PSBT, advanced multisig, published firmware source, user-supplied dice entropy |
| SeedSigner | DIY (RPi Zero + camera), stateless | No persistent storage and no key generator of its own — you supply the entropy |
| Foundation Passport | Airgapped, published firmware and schematics | US-made, QR-based signing |
| Trezor | USB, published firmware | Most accessible; no secure element on older models |
| Ledger | USB, closed operating system | Largest market share; secure element |
| BitBox02 | USB, published firmware, Swiss | Bitcoin-only edition |
This wiki does not rank these devices or name a winner. “Open source” in particular is not a single property: firmware licence, board schematics and secure-element code are three separate questions, and the answers rarely coincide — check the vendor’s own repository rather than a label in a review.
What you are trusting
Buying a signing device does not remove trust, it relocates it. Three things are taken on faith at once:
- The random number generator. The device produces a seed and shows you words; the quality of the randomness behind them is indistinguishable from outside. A working generator and a broken one yield the same-looking words, the same fingerprint and the same addresses.
- The firmware. That what the screen displays is what the device actually signs.
- The device’s integrity in transit. That nothing was altered between the factory and you.
The useful question when comparing devices is therefore not “does it have a good generator” — that cannot be answered from outside — but is there any source of randomness beyond the manufacturer’s own silicon, and can the result be reproduced independently. Devices that accept your own dice rolls in place of internal entropy make the seed replayable: the same roll sequence can be run through an independent implementation and the words compared. Devices whose entropy is entirely internal cannot be checked by the user at all.
July 2026 made this concrete. A build defect in COLDCARD firmware routed seed generation to a software fallback generator; neither the firmware, nor the screen, nor code review gave any signal, and seeds created over several years were predictable. Note what the case does and does not show: not that one manufacturer is worse than another, but a class of failure to which any device is exposed when all of its randomness originates inside a single vendor’s silicon. A secure element does not help here — it defends against physical key extraction, whereas these keys were computed remotely, with no one touching the device. Source: Rolling your own seed.
Source: Hardware Wallets, Coldcard Guide, SeedSigner Guide
Multisig
Multisig (M-of-N) requires M signatures out of N possible keys to spend. Benefits:
- Eliminates single point of failure: lose one key → funds still safe
- Eliminates single point of theft: steal one key → funds still safe
- Geographic distribution: keys can be stored in different locations
What protects you is not the number of keys but their independence. A quorum assembled entirely from one manufacturer’s devices running one firmware gives no protection against a defect in that manufacturer: every key was derived by the same mechanism and falls the same way a single key would. Vendor diversity across the quorum is the property that matters.
Common setups:
- 2-of-3: most common; one key lost is tolerable; two keys required to spend
- 3-of-5: higher redundancy, higher complexity
Unchained Capital’s model: collaborative custody with 2-of-3 where the user holds 2 keys and Unchained holds 1. The user retains control; Unchained can help recover if one user key is lost.
Source: Multisig
Wallets
| Wallet | Type | Platform | Notes |
|---|---|---|---|
| Electrum | Desktop hot + cold | Windows/Mac/Linux | Mature, coin control, connects to own node |
| BlueWallet | Mobile | iOS/Android | Watch-only, PSBT multisig, LN layer |
| Coldcard | Hardware signing device | Airgapped | microSD or QR transfer; see the trust caveats above |
| SeedSigner | DIY hardware | Airgapped RPi | Stateless, cheapest airgapped option |
| Smartphone cold storage | Repurposed phone | Airgapped phone | Old phone + Electrum in airplane mode |
PGP (Verifying Software Downloads)
Before running any Bitcoin software, verify the cryptographic signature of the download. PGP (Pretty Good Privacy) allows developers to sign releases; users verify signatures against known public keys. A guide to verifying downloads using GPG command-line tools is available in the storage practice section.
Physical Security
The weakest link in Bitcoin security is often physical:
- Seed stored in a single location can be lost in a fire or flood
- Seed written on paper can be read by anyone who finds it
- Passphrase stored with seed defeats its purpose
Best practices:
- Metal seed plate (fire/water resistant)
- Seed and passphrase stored separately
- Multisig with geographically distributed keys
- Trusted party with one key but not the passphrase (Unchained model)
Common Attacks
| Attack | Description | Defense |
|---|---|---|
| Supply chain | Compromised hardware wallet before delivery | Buy direct from manufacturer; verify firmware |
| Seed theft | Physical access to seed storage | Passphrase, geographic distribution |
| Phishing | Fake wallet website, or a site offering to “check your wallet for a vulnerability” | Verify URLs; never type a seed anywhere — a genuine check never requires one |
| Weak key generation | Vendor’s generator produces predictable seeds | User-supplied entropy where the device allows it; a multisig quorum spanning several manufacturers |
| $5 wrench | Physical coercion | Geographic key distribution, multisig, decoy wallets |
| Malware | Clipboard hijacking of addresses | Air-gapped signing, hardware wallets |
Sources
- Multisig
- 21ideas Glossary
- Seed Security
- Seed Phrases
- Passphrase Guide
- Hardware Wallets
- Coldcard Guide
- SeedSigner Guide
- Rolling your own seed
Related pages
- Bitcoin — what you’re securing
- Multisig — deep-dive on M-of-N schemes, MuSig2, and PSBT workflow
- Taproot — MuSig2 and Schnorr signatures for multisig privacy
- Privacy — privacy and security reinforce each other
- Storage — practical cold storage and hardware wallet setup guides
- Hal Finney — PGP pioneer and early Bitcoin security thinker
- Cypherpunks — the philosophy behind self-custody and privacy