How to Multisig with Backpack Wallet
With our latest release, Backpack Wallet is now the only Solana wallet to support multisig protection across the world's most trusted cold storage hardware providers:
Using a combination of software wallets (hot wallets) like Backpack and cold storage hardware wallets to create multisig protection is significantly more secure than using just one.
Solana has several native multisig management platforms that can be used with Backpack Wallet and the hardware wallets above.
For best practices and utmost peace of mind, you can now choose from three different cold storage hardware wallets for even more security.
Just hook them up to Backpack Wallet and make your crypto experience more secure and seamless than ever.
How Multisig Works
Multi-sig is one of the most secure methods for storing crypto assets and interacting with the blockchain. A common strategy, '2-of-3 multisig,' involves three unique cryptographic keys. Any 2 of these 3 keys must be used to authorize a transaction.
Remember, the following example is for 2-3 multi-sig but you can have anything combination thereof, such as 3-4, 5-10, 100-101 etc. Keep in mind that signing complexity increases exponentially the more keys you add.
Three Keys Setup: You set up three distinct cryptographic keys. These keys can be stored in different places, such as two hardware wallets (cold storage) and one online wallet (hot wallet) or in three hardware wallets.
Example:
Key 1: Stored in a Ledger hardware wallet.
Key 2: Stored in a Trezor hardware wallet.
Key 3: Stored in a Keystone hardware wallet.
Two Signatures Required: To perform a transaction, any two of these keys must sign off. For example, Key 1 and Key 2 could authorize a transaction while Key 3 remains unused. This ensures that no single keyholder can authorize transactions independently.
Who Uses Multisig?
Multisig is perfect for three main groups. This level of protection requires more technical knowledge to set up and use, however, the added security benefits provide significant value for those with complex security needs.
Institutional Investors/Companies: Where multiple parties need to approve transactions.
High Net-Worth Individuals: To add an extra layer of security to their crypto holdings.
Security-Minded Users: For those who want the highest level of security for their assets.
By implementing 2-of-3 multisig, users can ensure their crypto assets are protected with a robust security measure, reducing the risk of theft or unauthorized transactions.
Benefits of Multisig
There are multiple benefits to multisig, which makes this technique one of the industry standards for institutional grade security.
Enhanced Security: If one key is compromised, the attacker still needs another key to perform any transactions, significantly reducing the risk of unauthorized access.
Redundancy: If one key is lost or inaccessible, the other two keys can still authorize transactions. This provides a safety net against the loss or theft of a single key.
Fraud Prevention: Requiring multiple approvals makes it more difficult for fraudulent transactions to occur, as it requires collusion between multiple parties.
How To Use Backpack Wallet For Multisig Protection
Backpack Wallet can be used to enable multisig protection in a variety of ways including:
Creating multiple hot wallets in Backpack
Using a combination of Backpack hot wallets and cold storage hardware wallets
Connecting cold storage hardware wallets to Backpack
For the most secure method, utilize this last option.
In this scenario, you will import your cold storage hardware wallets into Backpack and then connect Backpack to a multisig creation platform.
The creation platforms completely manage multisig setup including determining the number of signers, entering approvers' wallet addresses, and setting up a secure vault. After a multisig account is set up, management of the assets requires using the platform and connecting the appropriate wallets to approve transactions.
But it's not as complicated as it sounds.
Here’s the step-by-step.
Import your cold storage hardware wallet(s) to Backpack.
Open the Settings menu and select 'Add Account'
Select 'Import Wallet' and choose the appropriate network
Select 'Use a hardware wallet' and choose 'Use a Keystone wallet'
Follow directions on device to approve connection
Proceed with wallet setup instructions
Visit a reputable multisig wallet platform that has integrated Backpack Wallet and initiate the setup process.
Utilize Backpack Wallet as the interface to manage signatures and transactions.
Note: You will sign transactions on your cold storage hardware device using Backpack Wallet as the connection point.
Hardware Wallet Best Practices
There are several cold storage hardware wallet best practices to follow which increases the security of your digital assets.
Always purchase your hardware wallets directly from the manufacturers website or official stores on Amazon and other online marketplaces
Update the firmware of the hardware wallet before initiating any transactions
Test hardware wallet connections with a small amount of crypto before sending full amounts
Initiate a recovery process before sending full amounts of crypto
Store recovery information in a secure location
Store local password information in a separate secured location
And that's a wrap. Secure your crypto with multi-sig cold storage and Backpack Wallet today for utmost peace of mind.
For any inquiries, please contact support@backpack.exchange
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