Published on: 2021-07-25T04:49:24+00:00
A member of the Bitcoin development community, Michael Flaxman, has proposed a method for preventing privacy leaks in multisig quorums by using BIP32 paths. The scheme, which can be found on GitHub, aims to address the issue of attackers obtaining a private BIP32 seed along with knowledge of the HD paths being used. It is assumed that most people store their descriptors alongside their seeds for robust recovery.To solve this problem, the use of taproot with multisignatures and threshold signatures is suggested. This approach would prevent privacy leaks as long as participants do not reuse the same keys in different contexts. As a result, wallet authors are encouraged to focus on implementing support for taproot and MuSig or MuSig2 instead of the proposed scheme.The new method offers several benefits. It prevents unauthorized parties from accessing the BIP39 seed phrase and gaining information about transactions in any multisig quorum that seed participates in. Additionally, trusted-minimized third parties can hold an emergency recovery key in a multisig quorum without knowing what that key protects. This scheme has already been active on mainnet for some time and has gained support from various Coordinators and Signers. Currently, large sums of bitcoin are held using this method.The publication of this method aims to encourage more interoperable hardware wallet/coordinator software support, which would enhance privacy and improve user experience. Feedback on the proposed scheme is welcomed as the community continues to work towards these goals.
Updated on: 2023-08-02T04:23:46.112777+00:00