Bitcoins evolution has come a long way since its formation in 2009. It has achieved remarkable success and made way for hundreds of other cryptocurrencies. The Bitcoin hardware has also evolved; however, Bitcoin hardware devices need to improve to handle complex transactions.
Based on the test report released on September 2020, on Casa Blog, by Jameson Lopp, co-founder and CTO of Casa, a crypto custody firm, on Bitcoin multi-signature hardware signing performance, it is said that the hardware crypto wallet devices can handle small and simple transactions well.
However, problems start when the transactions become complicated. Lopp stated that while Casa has no control over the hardware devices, its goal is to support any device.
Lopp’s decision to research the hardware was with the hope to come to some conclusions and help multisig software providers with a better understanding of the limits of the hardware and customize wallet software for better performance.
Casa is compatible with six hardwares, including Trezor, Ledger, Coinkite, and Coldcard. The test was done on all supported hardware, including Bitbox.
Jameson Lopp created a series of tests to determine these hardware wallet potentials when signing multi-signature transactions of varying complexity. He repeated these tests and came to the decision that it is better and more secure if the hardware devices can show progress indicators for loading and signing.
When it came to overcoming transaction size limitation and delay of transaction processing time, Lopp suggested that hardware wallets should break up and send in multiple smaller transactions that are below its limits.
When the transaction process takes a lot of time, some hardware devices lock themselves from inactivity. Lopp suggested that the least the device manufacturers can do is to disable the screen lock functionality while a transaction is taking place to avoid any inconvenience.
In his suggestions, Lopp also mentioned that the hardware devices should also support partially signed Bitcoin transactions (PSBT) and all possible multisig transactions that are valid.
There are usually two steps to be followed by the hardware devices after signing a Bitcoin transaction. Lopp says, “At first the transaction gets loaded on the device, analyzes the details and then displays them on screen for user confirmation. The details are basically the address to which funds are being sent, the amount being sent, and the transaction fees. In the second step, post confirmation from the user, the device signs each transaction input and then returns the signed transaction to the wallet software.”
Lopp did the testing on the Bitcoin Hardware device based on the following configuration.
Jameson Lopp set up the test by leveraging Electrums’s 4.0.2 appimage on Debian Linux and created various P2WSH (native segwit) multisig wallets that use Bitcoin’s testnet and with the hardware devices plugged in via USB. A deposit of 100 UTXOs was deposited in each wallet for the test.
In the end, the test result indicated that the Bitcoin devices need to improve to handle complex transactions.