{"id":566210,"date":"2026-09-27T16:00:37","date_gmt":"2026-09-27T15:00:37","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=566210"},"modified":"2026-09-27T14:54:51","modified_gmt":"2026-09-27T13:54:51","slug":"bitcoins-bip138-draft-shows-why-a-seed-may-not-rescue-a-multisig-wallet","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/bitcoins-bip138-draft-shows-why-a-seed-may-not-rescue-a-multisig-wallet\/","title":{"rendered":"New Bitcoin proposal rescues locked multisig wallets &#8211; At a hidden cost"},"content":{"rendered":"<p>Bitcoin's BIP138 wallet-backup proposal was <a href=\"https:\/\/github.com\/bitcoin\/bips\/pull\/1951\">merged into the Bitcoin Improvement Proposals repository<\/a> on Sept. 21, but the specification remains Draft. It aims to preserve information that a seed phrase may not restore in a complex wallet. The tradeoff is that a third party could read that information if it already holds an eligible extended public key, or xpub, and obtains a copy of the encrypted backup.<\/p>\n<p>A multisignature wallet requires more than one signer. Its <a href=\"https:\/\/github.com\/bitcoin\/bips\/blob\/master\/bip-0138.md\">descriptor<\/a> records the public keys and spending rules that tell wallet software how to reconstruct the account and find its coins. A seed phrase can regenerate one signer's private keys, but losing the descriptor can still leave a multisig or miniscript script impossible to reconstruct from that seed alone.<\/p>\n<p>The proposal describes another failure: a wallet designed to survive the loss of one seed may also lose that signer's public key. The remaining signers can then lack a piece of the script needed to recover the coins. These are risks for wallets whose spending setup depends on information beyond a seed, not a claim that every Bitcoin wallet needs this backup.<\/p>\n\n<div class=\"cs-article-embed\">\n    <a href=\"https:\/\/cryptoslate.com\/a-flaw-in-coldcard-seed-generation-lets-attackers-recreate-private-keys-from-the-press-of-a-button\/\" class=\"cs-article-embed__link\">\n        <div class=\"cs-article-embed__body\">\n            <span class=\"cs-article-embed__related-reading\">Related Reading<\/span>\n            <h3 class=\"cs-article-embed__title\">A flaw in Coldcard seed generation lets attackers recreate private keys from the press of a button<\/h3>\n        <\/div>\n        <span class=\"cs-article-embed__arrow\" aria-hidden=\"true\">\n            <i class=\"fa-light fa-arrow-up-right\"><\/i>\n        <\/span>\n    <\/a>\n<\/div>\n\n<p>BIP138's answer is an encrypted file holding descriptors, wallet policies or other non-seed metadata. Private key material must be removed before encryption. A holder of an eligible xpub from the backed-up wallet can decrypt a copy without the wallet's seed. That reveals public keys and script structure needed for recovery, while the xpub alone does not give the holder the private keys required to sign.<\/p>\n<p>The draft sets limits on who can decrypt. Public keys that appear directly in a script, and xpub roots that could be exposed by spending, are excluded as recovery keys. If a cosigner's key is excluded, that person cannot use it to open the file. Those limits keep an on-chain public key from becoming a key to the off-chain backup.<\/p>\n<p><a href=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-1dd79077-b1d8-4fe3-ae66-fa148ee1c866.png\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-566211 size-full\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-1dd79077-b1d8-4fe3-ae66-fa148ee1c866.png\" alt=\"BIP138 draft infographic showing why a seed may not restore a multisig wallet without its descriptor, how an eligible xpub can decrypt an encrypted metadata backup, and the three conditions for a server to read it.\" width=\"1122\" height=\"1402\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-1dd79077-b1d8-4fe3-ae66-fa148ee1c866.png 1122w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-1dd79077-b1d8-4fe3-ae66-fa148ee1c866-240x300.png 240w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-1dd79077-b1d8-4fe3-ae66-fa148ee1c866-819x1024.png 819w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/exec-1dd79077-b1d8-4fe3-ae66-fa148ee1c866-768x960.png 768w\" sizes=\"(max-width: 1122px) 100vw, 1122px\" \/><\/a><\/p>\n<p>The <a href=\"https:\/\/github.com\/bitcoin\/bips\/blob\/master\/bip-0138.md\">privacy warning<\/a> concerns an xpub disclosed before the multisig wallet was made. If a wallet-service server already knows an account xpub and that same xpub is reused as an eligible multisig key, the server could decrypt the backup if it gets a copy. It could learn the wallet metadata inside, though this would not itself give it spending authority. The BIP describes a conditional exposure, not a reported breach.<\/p>\n\n<div class=\"cs-article-embed\">\n    <a href=\"https:\/\/cryptoslate.com\/bitcoins-newest-mobile-privacy-feature-could-make-your-incoming-money-completely-invisible\/\" class=\"cs-article-embed__link\">\n        <div class=\"cs-article-embed__body\">\n            <span class=\"cs-article-embed__related-reading\">Related Reading<\/span>\n            <h3 class=\"cs-article-embed__title\">Bitcoin\u2019s newest mobile privacy feature can make your incoming money completely invisible<\/h3>\n        <\/div>\n        <span class=\"cs-article-embed__arrow\" aria-hidden=\"true\">\n            <i class=\"fa-light fa-arrow-up-right\"><\/i>\n        <\/span>\n    <\/a>\n<\/div>\n\n<p>A <a href=\"https:\/\/github.com\/pythcoiner\/bip138\">public Rust implementation with command-line build instructions<\/a> exists. The BIP says Liana, a <a href=\"https:\/\/cryptoslate.com\/crypto-wallets\/bitcoin-wallets\/\">Bitcoin wallet<\/a>, uses an earlier backup format that is incompatible with the current BIP138 file. The proposal's merge therefore establishes a published draft, not a Bitcoin network change or a guarantee that today's wallets can create and restore this format.<\/p>\n\n<div class=\"cs-article-embed\">\n    <a href=\"https:\/\/cryptoslate.com\/popular-bitcoin-wallets-risk-losing-support-for-new-hardware-devices-as-critical-security-bridge-stops-accepting-new-devices\/\" class=\"cs-article-embed__link\">\n        <div class=\"cs-article-embed__body\">\n            <span class=\"cs-article-embed__related-reading\">Related Reading<\/span>\n            <h3 class=\"cs-article-embed__title\">Popular Bitcoin wallets risk losing support for new hardware devices as critical security bridge stops accepting new devices<\/h3>\n        <\/div>\n        <span class=\"cs-article-embed__arrow\" aria-hidden=\"true\">\n            <i class=\"fa-light fa-arrow-up-right\"><\/i>\n        <\/span>\n    <\/a>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Its proposed descriptor backup could aid recovery, while an eligible xpub already known to a server may expose the encrypted file&#8217;s metadata.<\/p>\n","protected":false},"author":1264,"featured_media":566234,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,77968,60206],"tags":[81073,77925],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>New Bitcoin proposal rescues locked multisig wallets - At a hidden cost<\/title>\n<meta name=\"description\" content=\"BIP138&#039;s draft descriptor backup could aid multisig recovery, but a server with an eligible xpub and a copy of the file could read its metadata.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/bitcoins-bip138-draft-shows-why-a-seed-may-not-rescue-a-multisig-wallet\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New Bitcoin proposal rescues locked multisig wallets - At a hidden cost\" \/>\n<meta property=\"og:description\" content=\"BIP138&#039;s draft descriptor backup could aid multisig recovery, but a server with an eligible xpub and a copy of the file could read its metadata.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/bitcoins-bip138-draft-shows-why-a-seed-may-not-rescue-a-multisig-wallet\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2026-09-27T15:00:37+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-09-27T13:54:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2026\/09\/bitcoin-bip138-multisig-backup.webp\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/webp\" \/>\n<meta name=\"author\" content=\"Liam &#039;Akiba&#039; 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