Considerations about Bitcoin protection

OPSEC, Duress Wallets, and Shamir Backup

Here's a summary of the most important information, focusing on Operational Security (OPSEC) and basic security measures around Bitcoin.

Operational Security (OPSEC)

OPSEC stands for Operational Security. It's a process that focuses on protecting sensitive data, like personal information, to prevent adversaries from accessing it. In the context of securing Bitcoin, adversarial parties could be hackers, burglars, or even untrustworthy people you know. When you use OPSEC, you're essentially limiting the information available to these parties, making it much harder for them to exploit you for financial gain.

• OPSEC is crucial for protecting your Bitcoin from adversaries like hackers, burglars, and untrustworthy individuals. It involves protecting sensitive data and personal information to prevent unintentional disclosure.

• Avoid sharing specifics about your Bitcoin holdings, addresses, exchange accounts, or device details. Discussing Bitcoin on a conceptual or technical level is acceptable.

• Use strong, unique passwords for each account and change them regularly. Leverage password managers for generating and storing these passwords, but avoid storing seed phrases in them.

• Avoid using SMS for two-factor authentication (2FA) due to vulnerability to SIM swap attacks. Use authenticator apps like andotp, Authy or similar, or consider security keys like YubiKeys.

• Lock down your SIM card with your mobile carrier to mitigate the risk of SIM swap attacks. Consider dedicated providers with enhanced SIM swap protection.

• Never store long-term Bitcoin holdings on exchanges or online wallets. Use hardware wallets or consider multisig solutions for enhanced security if you are skilled enough and know what you are doing.

• Store backup seed phrases offline in a secure, tamper-proof manner. Avoid storing them digitally or entering them into internet-connected devices.

• Keep cold storage devices in access-controlled locations to prevent theft. Be aware that Bitcoin's popularity has made it a target for criminals, including burglars and gangs.

• Avoid complacency and the "it will never happen to me" mindset. Many Bitcoin holders become victims because they fail to implement basic security precautions.

Criminals

• Bitcoin's mainstream adoption has attracted the attention of criminals. Criminals are increasingly targeting individuals to steal their Bitcoin through sophisticated methods.

• Criminals identify victims through social media posts, public discussions about crypto, meetups, conferences, and data harvesting from breaches.

• Organized crime rings are known to track victims for extended periods before executing attacks. Tactics include home invasions, muggings, and using dating apps to find and subdue victims.

• Minimizing your known association with Bitcoin is crucial for reducing exposure to organized crime. Avoid flaunting wealth on social media, participating in risky face-to-face trades, and displaying crypto-related items.

• Implementing strong privacy and security measures is essential for protecting yourself from criminals.

Duress Wallets

• Duress wallets, also known as decoy wallets, are a speculative defense mechanism. The idea is to offer a smaller amount of Bitcoin to an attacker to de-escalate a situation.

• The effectiveness of duress wallets is debatable. There's no guarantee how an attacker will react, and they might escalate the situation or demand more.

• Using duress wallets may lead to legal complications. Authorities could argue that misleading an attacker contributed to a dangerous situation.

• Strong privacy and operational security are the best defense against physical attacks. Make it difficult for attackers to identify you as a target in the first place.

Shamir Backup

• Shamir Backup is a security standard that helps protect against theft and loss of your recovery seed. It allows you to create multiple shares, with a specified threshold required for recovery.

• If you lose one share in a Shamir Backup scheme, your wallet remains secure, as long as the number of compromised shares doesn't meet the threshold. This provides a significant advantage over single recovery seed backup.

• Each Shamir Backup share contains 20 or 33 words and uses a different word list than BIP-39 recovery seeds. Never make digital copies or upload your recovery shares online.

Shamir Backup offers a more secure and resilient way to protect your Bitcoin compared to traditional single seed backups. By dividing your recovery seed into multiple shares and setting a threshold, you make it significantly harder for attackers to compromise your wallet and increase your chances of recovery even if some shares are lost.

Seed Phrase Security

• Storing an unencrypted seed phrase online is highly risky and should be avoided. This includes taking photos, using cloud-synced note apps, or storing it in any online account.

• Avoid using brain wallets, as they are vulnerable to brute-force attacks. Humans are not good sources of entropy, and sophisticated attackers can easily crack brain wallets.

• Splitting a seed phrase into multiple parts significantly weakens its security against brute-force attacks.

• While memorizing a seed phrase can be a temporary emergency strategy, it's not a reliable long-term solution.

• Trezor's Shamir Backup, Blockchain Commons Sharded Secret Key Reconstruction, Seed XOR, and Multisignature are superior backup schemes that offer enhanced security and resilience.

• Always test your backup by restoring a wallet from it to ensure it works when you need it.

• Use tamper-evident bags to seal your seed phrase backups and check them periodically for any signs of compromise.

• Consider investing in durable seed backup devices, such as metal plates.

• Plan your security measures for future value, not just your current holdings. The value of your assets may increase significantly over time.

• Remember to back up all the attributes related to your wallet, including software, script type, derivation path, and extended public keys if using multisig.

• Seed storage is a personal problem that requires careful consideration of your individual circumstances and threat model.