Wallet Security

Authored by:

Piña

🔑 Key Takeaway: Wallet security is control of keys and verification of every signature. Hardware and multisig fail if users sign attacker-controlled calldata blindly.

In cryptocurrency, asset security is tied to how control over funds is protected. This framework goes from ownership models and wallet types to signing verification, seed-phrase custody, and safer smart contract interaction.

What this framework covers

1. Custodial vs Non-Custodial: who holds keys and what risk that creates.
2. Cold vs Hot Wallet: online convenience versus offline isolation tradeoffs.
3. Wallets for Beginners and Small Balances: lighter setups for lower stakes.
4. Wallets for Intermediates and Medium Funds: upgrades as value grows.
5. Multisig Wallets for Advanced Users and High Funds: high-value multi-signer design.
6. Account Abstraction Wallets: smart-account features and new risk surface.
7. TEE-based Encumbered Wallets: encumbered/TEE-oriented models and caveats.
8. Signing and Verification: never sign blindly.
   • Verifying Standard Transactions (EOA)
   • Multisig Signing Process
   • Safe Multisig: Step-by-Step Verification
   • Squads Multisig: Step-by-Step Verification
   • Using EIP-7702
9. Smart Contract Interaction Security: addresses, approvals, and simulation before interact.
10. Seed Phrase Management: offline custody and emergency handling.
11. Tools and Resources: curated verification and training tools.

Related frameworks

• Multisig for Protocols: protocol treasury and organizational multisig ops
• OpSec: device and operator hygiene around keys
• Front-End Web App: client compromise can rewrite what wallets sign
• ENS: name resolution integrity on send destinations
• Physical Security: seed and device physical risks
• Incident Management: response after suspected key compromise

Further Reading

See Tools and Resources. Classic related prose: xkcd 538 on physical coercion of crypto holders.