MultisigBackup.com: Backup and recover a k-of-n descriptor using only n seeds

The project multisigbackup.com addresses a common misconception among users regarding the recovery of 2-of-3 multisig wallets, which requires not only two seed phrases but also the output descriptor containing crucial information such as derivation paths and extended public keys (xpubs). Without the descriptor, access to funds in a multisig wallet could be permanently lost if one of the seeds were misplaced. This has led users towards using collaborative custody services like Unchained, Casa, Nunchuk, etc., which manage the descriptor backup process for them, albeit at the cost of privacy, annual fees, and trust in the service provider's ability to maintain secure backups.

Traditional methods of descriptor backup, including digital storage on laptops or cloud services and physical copies on USB sticks or printed paper, present various risks from accidental deletion to physical damage. An alternative, more durable solution involves engraving the descriptor onto steel plates with devices like SeedHammer, though this comes with a higher price tag.

multisigbackup.com aims to simplify and secure the backup and recovery process of multisig descriptors by allowing users to encrypt their descriptor and inscribe it onto the Bitcoin blockchain via a taproot address. This method ensures permanent, private, and reliable backup without the need for physical copies. Recovery is streamlined through the connection of two hardware devices, supporting both Ledger and Trezor, or manually by entering the master fingerprints of two seed phrases to locate the encrypted descriptor onchain. The encryption process involves extracting xpubs and master fingerprints, encrypting these elements with a random seed, then using Shamir's Secret Sharing to split and encrypt the seed into shares that are appended to the descriptor.

This innovative approach offers several benefits including a manageable one-time cost similar to conducting a few multisig transactions, strong data availability guarantees against loss or damage, preservation of privacy since no sensitive information is publicly disclosed, simplified recovery conducive to easier inheritance planning, and an enhanced user experience by potentially integrating payment links or direct inscription during wallet setup. Future developments for the project include support for Taproot multisig, Miniscript, non-standard descriptor formats, size optimization for inscriptions, and software wallet integrations. More details and the source code can be found at https://github.com/joshdoman/multisig-backup.