Glossary
2-of-3 wallet
A 2-of-3 wallet has three keys, and any two can spend the bitcoin. How it works, what you need to write down, and how it helps your family when needed.
A 2-of-3 wallet is a multisig with three keys in which every transaction needs signatures from any two of them. Losing one key doesn’t lock the funds, and one stolen key isn’t enough to steal them.
It’s a special case of multisig. The three keys can sit on three hardware wallets, for example a Trezor, a BitBox and a third device kept in another place. The shared wallet runs in open-source software such as Sparrow or Nunchuk. We set it up for bitcoin.
Recovery needs two things: two working keys and the setup record, which holds information about all three keys (including the xpub). That record is part of the backup. It doesn’t let anyone spend funds, but without it, rebuilding the wallet is hard or impossible.
It’s good to test the backup: restore the wallet on a fresh device before you need to. We do this with the client during setup.
Why it matters for your family
One key can stay with you, the second with a trusted person or in a deposit box, the third in another city. Your family doesn’t get one phrase that gives everything, yet after your death two keys are within their reach. When this setup makes sense is explained in the guide on 2-of-3 multisig, and the setup page describes the configuration.