Seedless Wallets Want to Make Bitcoin More User Friendly

Seedless Wallets Want to Make Bitcoin More User Friendly

By stvleong | Steven Leong | 8 Jun 2020

Bitcoin (BTC) has been around for more than 11 years, but for the average person it is still pretty difficult to use the network safely. One reason is that Bitcoin operates very differently from conventional online payment systems.


In Bitcoin, users manage their own money in full, which means that they are responsible for protecting it and not making mistakes while sending an irreversible transaction. There are no third parties to your rescue if you pay wrongly or if a hacker reaches your private keys.

A new generation of Bitcoin wallets is seeking to address at least some of these problems with the experience of BTC users by using so-called seedless multisig wallets. These bags are aimed at enabling non-custodial storage of BTC and eliminating the current default backup feature in most wallets, including writing and secure storing a 12- or 24-word backup paragraph.

The promise of seedless multisig wallets
It is mainly a combination of backup options in the form of devices, service providers, hardware wallets, confident friends or family members and other sources, that replaces the need to write a backup passphrase and to keep it safe.

Looking for balance
Naturally, seedless multi-seeds have their downside risks, as Unchained Capital Chief Strategy Officer Dhruv Bansal explained in October last year on the Stephan Livera Podcast segment.

"I think it's insane, personally, to run seedless," Bansal told Livera during his conversation.

"I guess I wouldn't be comfortable doing that without a seed phrase or tossing out your seed phrase, when you assume that you have ample other apps. The case I think people like Casa sometimes make for seed phrases is difficult, I suppose, and they can be lost.

Bansal and Livera have addressed the need to create a BIP39 passphrase in ways that would not necessarily produce a single failure point. And the different seed phrase shares can be encrypted.

"In fact, one addition to Unchained 's conversation is to attempt to encrypt these shares," said Bansal. "Not even one of them is there, but it's much easier to assume it's better."

At the end of the day, these various wallet providers simply try to find the right balance between user experience and security, and a definite answer can not be obtained until several architectures are in the wild.

Seedless Lightning Wallets Network
Many mobile BTC wallets, of course, are currently based on the Lightning Network as the instantaneous layer two protocol makes almost free payments more meaningful when you use BTC on your phone. After all, nobody wants to walk in their pockets with the wealth of their whole life.

As smaller quantities are expected to be used with Lightning, the user experience could be further enhanced, as the security requirements are less stringent.

Tankred Hase has developed a new mobile Bitcoin wallet library, the photon library, that provides the user with a model based on SMS and cloud backups to back up their private keys and their channel state. Photon-lib research was helped by learning about user experience when working on the Lightning app for Lightning Labs.

"Most users would like to first experiment with a wallet," Hase told "Maybe feed Pollofeed chickens or order a sticker in the Blockstream shop. This makes mobile wallets easy to use during the initial setup process.

According to Hase, redundancy should be the most important aspect of the backup process when a new user plays with the Lightning Network.

Users can then "upsold" additional security features such as a PIN or time delay by adding more funds.


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I'm a Digital Marketing Lead | Crypto Trader | Affiliate Marketer and love to write posts related to crypto and anything that is interesting.

Steven Leong
Steven Leong

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