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Chapter 8 · Choose your level

Which Bitcoin Setup Is Right for Your Family? (6 Questions)

Prefer to watch? This chapter is also a short video (about 4½ minutes). The full text is below.

In one minute: There are three ways to set up your bitcoin, from simplest to strongest: Beginner (one hardware wallet), Intermediate (add a passphrase) and Advanced (2-of-3 multisig). Each one protects against more, and each one has more pieces for your family to understand. Six questions point you to the right one. When you're torn between two, pick the simpler one: a setup you both understand beats a stronger one only one of you does. And you can always move up later.

Every chapter so far has said "it depends on your level." This is where you pick one.

Here's the most important thing first: there's no wrong level. All three keep your bitcoin off exchanges, keep the key offline, and end with metal backups and a family plan. The difference is what each one protects against, and how much there is to learn.

And every extra layer of protection is also an extra piece your family has to understand. A stronger setup that only one of you understands can lose more bitcoin than a simple one you both do.

The three levels

Beginner: one hardware wallet. One device, your recovery words on two metal backups in two places, and a letter of instruction. This is where most families should start.

Intermediate: add a passphrase. Everything in Beginner, plus an extra secret added to your words, with its own backup kept somewhere else. Now someone who finds your backup still can't take your bitcoin.

Advanced: 2-of-3 multisig. Three devices, ideally from three different makers, each with its own backup, kept in three places. Any two can move the bitcoin, so losing one key, or having one stolen, isn't a disaster. Plus a backup of the wallet's "map" (Chapter 7).

Side by side

All three also need metal for the backups, from a plain steel plate and a hand punch to a ready-made product (Chapter 6).

Six questions

Answer these together. Each one has three answers; note the letter of the one that fits best.

1. If this bitcoin vanished tomorrow, what would it mean for your family? A. It would hurt, but we'd be fine. B. It would set us back years. C. It would change our lives.

2. How comfortable is the partner who doesn't handle the bitcoin with following written steps on a device? A. Nervous. It needs to be as simple as possible. B. Fine, with clear steps. C. Comfortable. They might even enjoy it.

3. Do you worry about someone finding a backup: guests, workers in the house, a break-in? A. Not really. B. Yes, that worries me. C. Yes, and I don't want any single place to be enough.

4. How many safe places do you have for backups, counting your home? A. Two: home and one other. B. Two, maybe three. C. Three or more, far enough apart.

5. How much time can you set aside? A. An afternoon. B. A weekend. C. A few weekends, plus a check-up every year.

6. How would you feel depending on a single device maker? A. Fine. If something went wrong, I'd restore on another device. B. A bit uneasy. C. I'd rather not depend on any one company.

Mostly A's: Beginner. Mostly B's: Intermediate. Mostly C's: Advanced.

Two rules on top of the count:

• If it's a tie, pick the simpler level.
• If you answered A to question 2 or question 5, start at Beginner, whatever the rest say. A plan your partner can't follow, or a setup you don't have time to finish, protects nobody.

You can move up later

Picking Beginner isn't settling. It's the right first step for most families, and it's the foundation for the other two: every level starts with a hardware wallet and the habits from Chapters 3 to 7.

Moving up later is simple: set up the stronger level, test it, then send your bitcoin from the old wallet to the new one, just like the fix for exposed words in Chapter 6. Plenty of families start at Beginner, live with it for a year, and move up once it feels routine.

Talk about it

1. Which letters did each of us pick? Where did we disagree, and why?
2. Is the level we landed on one we both understand?
3. If we chose Beginner, is there anything that would make us want to move up in a year?

If one of you wants more protection and the other wants less to learn, start simpler and set a date to revisit it.

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