Multisig

Most people don't need multisig right away. Get comfortable with single-sig first. When your holdings grow or you need inheritance planning, come back here.

When should you use multisig?

Use multisig when the value you are protecting justifies extra setup, documentation, and recovery practice. A 2-of-3 wallet protects against one lost key or one stolen key, but it also requires wallet descriptor backups and a clear inheritance plan. Beginners should master single-sig first.

When You Need It

• Significant holdings that justify the added complexity
• Physical security concerns — no single location can be robbed for full access
• Inheritance planning — family members can access funds cooperatively
• Eliminating single points of failure — no one device or backup loss is catastrophic

How 2-of-3 Works

Three independent keys (three COLDCARDs, each with its own seed). The wallet requires any two of the three to sign a transaction.

To receive: Any device or the coordinator wallet can generate receive addresses.

To spend: Build a PSBT in the coordinator, sign on two of three COLDCARDs, broadcast.

Setup with COLDCARD + Sparrow

What You Need

• Three COLDCARDs (recommended), or two COLDCARDs and one other PSBT-compatible hardware wallet
• Sparrow Wallet on your computer
• MicroSD cards

Step 1: Generate Three Independent Seeds

Set up each COLDCARD with its own seed, independently. Each gets its own metal backup. Don't reuse seeds from your single-sig wallet.

Step 2: Export Public Keys

On each COLDCARD: Settings > Multisig Wallets > Export XPUB. Saves the public key info to MicroSD. COLDCARD Q can also display this as a QR code.

Step 3: Create the Wallet in Sparrow

In Sparrow: File > New Wallet. Select "Multi Signature." Set policy to 2-of-3, script type to Native SegWit (P2WSH).

Import each COLDCARD's public key into the three keystore tabs. Click Apply.

Step 4: Register on Each COLDCARD

Export the wallet configuration from Sparrow to MicroSD. Import on each COLDCARD via Settings > Multisig Wallets > Import from File. This lets each device verify transactions match the expected wallet.

Step 5: Verify Addresses

Generate the first few receive addresses in Sparrow and confirm they match on each COLDCARD. If they match, the setup is correct.

The Wallet Descriptor

A wallet descriptor is a standardized string containing everything needed to reconstruct your multisig wallet: all three public keys, the derivation paths, the quorum policy (2-of-3), and the script type.

The descriptor is as important as your seed phrases. With single-sig, a seed alone reconstructs the wallet. With multisig, you need both the seeds AND the descriptor. Without it, three seed phrases are just three unrelated wallets.

Back up the wallet descriptor:

• Export from Sparrow as a text file
• Store a copy at every seed backup location
• The descriptor contains only public keys — it's not secret

Geographic Distribution

No single location should hold full spending power:

• Location A: COLDCARD #1 + seed backup #1 + wallet descriptor copy
• Location B: COLDCARD #2 + seed backup #2 + wallet descriptor copy
• Location C: COLDCARD #3 + seed backup #3 + wallet descriptor copy

No two locations should share the same disaster risk. A fire at Location A leaves you with two keys at B and C — enough to spend and migrate to a new setup.

Recovery Scenarios

Lost device (not compromised): Use the remaining two to move funds to a new 2-of-3 wallet with three fresh keys.

Stolen device: The thief has one key and cannot spend alone. Use the remaining two to move ALL funds immediately. Set up an entirely new 2-of-3.

Two devices lost: Funds are permanently locked. 2-of-3 tolerates losing one key, not two.

Coordinator Alternatives

Sparrow is the recommendation for desktop power users. Alternatives:

• Nunchuk — mobile-friendly, NFC tap-to-sign, collaborative custody features
• Specter Desktop — connects directly to your own Bitcoin Core node

All three support COLDCARD and PSBT-based signing.