Over the past year, a passionate corner of the bitcoin world’s voice has been echoing through the Unchained Capital Twitter mentions, and dominating the time of all Unchained Capital employees at bitcoin conferences. It started off as a whisper, but this summer, turned into a roar. WEN COLDCARD?
Coldcard is the first PSBT based wallet, and the first air-gapped wallet, to gain our official support. We’re big fans of the Coinkite team and the products they’ve built, and so are our clients. If you’ve been waiting months for this moment, check out our step by step guide to get your vault created right now. For a limited time, Unchained Capital clients will receive a 10% discount code off a new Coldcard when you submit your profile to build your vault or apply for a loan.
Unchained Capital + Coldcard – PSBT Done Right
The first notable aspect of this integration is that Unchained Capital now speaks PSBT. Coldcard was the first hardware wallet to support PSBT or “Partially Signed Bitcoin Transaction” format, which is particularly useful in multisig applications requiring more than a single signature. This standard for saving partially signed transactions is relevant to all Unchained Capital clients whether you’re signing on your own or collaborating with others. Prior to the PSBT standard it was difficult, or impossible, for someone to sign a transaction via software like Caravan, and bring that partially signed transaction over to separate software like an Unchained Capital Vault, and for those separate software implementations to understand each other. With PSBT, this becomes a simple process.
We’ve also gone through pains to make the PSBT process as secure as possible. There are two ways you can structure a PSBT to sign via the Coldcard. The quickest implementation requires you to include your wallet Xpubs in each and every PSBT file. However, after discussing this option with the Coinkite team, we concluded this unnecessarily compromises privacy. Our implementation is privacy preserving. First, you configure your Coldcard with the Xpubs associated with your Vault or Loan, so that your future PSBTs don’t need to include this sensitive information. The result is a one time setup of your Coldcard when you create your vault, so it will always recognize the transaction it is being asked to sign. Unlike with other PSBT implementations, you’ll never pass extraneous wallet information in your PSBTs.
Both Unchained Capital and Coldcard clients are obsessed with security. One of the principal benefits of Coldcard is its air-gapped functionality, which is why our integration with Coldcard only supports air-gapped signing. Your Coldcard will never need to touch a computer or the internet to transact with Unchained Capital. This opens up a range of possibilities for how and where you store your device. If you’re storing a device in a bank vault or a remote location with no internet access, you can still sign seamlessly by transferring the PSBT file on an SD card and uploading the PSBT to an internet connected device at a later point in time, ensuring that your Coldcard can sign transactions without ever touching the internet.
More Options, No Single Points of Failure
Bitcoiners choose multisig to avoid single points of failure in their storage setup. While simply using multisig gets you most of the way there, optionality in which hardware devices you use in your multisig setup increases your security, as does your ability to use devices from multiple manufacturers in an M-of-N scheme. You’re now able to use Coldcard devices in your multisig quorum alongside Trezor or Ledger devices. This reduces your risk of being exposed to a single manufacturer’s vulnerabilities. Further, Coldcard’s use of the PSBT standard has prepared us to support other PSBT centric wallets in 2021.
We’re not done with Coldcard and the Coinkite team! We’ll be adding full Coldcard support (air-gapped only) to Caravan for trust minimized external recovery from vaults and loans. And while we won’t be adding any new hardware device support immediately, we’ll be busy researching other PSBT centric devices to add in 2021, as well as PSBT QR code transactions.
If you or your company want to learn more about the Unchained Capital and Coldcard integration, email us at email@example.com. Receive a 10% discount on your Coldcard purchase when you sign up at Unchained Capital and complete your profile.