I'm fully aware this is nothing for everyday use - and I'm also fully aware the current panic about ledger is exaggerated in some aspects. But I guess many of us will still switch to a different hw-wallet in the near future, so I wanted to share how you can easily create a Multi Signature Wallet using multiple hw-wallets to store your coins without trusting any single company.

What is Multi Signature?

As the name suggests, Multi Signature Wallets are crypto wallets that require it's outgoing transactions to be signed by multiple private keys. This is a native feature of BTC, and many other cryptocurrencies. On smart chains you would usually achieve this feature using a smart contract.

Usually you can freely choose how many keys can be used tin total, and how many are required for the transaction. An often used setting is 2 / 3, but you can also set it to whatever you like, for example 3 / 5 or 4 / 4.

Making a BTC Multi Signature Wallet:

For this example I make a BTC wallet using Sparrow. It's surprisingly easy to set it up. When creating a new wallet, you set the "Policy Type" to "Multi Signature" and you can freely choose how many wallets you want to use and how many are required to sign a transaction. A common multi signature configuration is 2 out of 3.

In the last step you add your individual keystores. Here you can create a new (also) hot wallet, or you simply connect to each of your hw-wallets.

Creating a Multi Signature Bitcoin Wallet with Sparrow

Usage

After applying the settings, your wallet is ready to use. If you make a transaction, you will be asked to sign it with 2 out of your 3 hw-wallets.

Benefits and Drawbacks

This wallet will not rely on a single hw-wallet. Even if a seed / device gets compromised, the money is still safe. The only central point of failure is the software wallet, but auditing software alone is a lot easier than auditing an entire device and all connected software. Sparrow Wallet is obviously open source.

The Cons are also pretty obvious: You have a little bit more to do and more wallets to store - if you don't have multiple wallets you would also need to pay more for this. Remember this isn't an every-day solution, but rather for people who either hold very large amounts of crypto or intend to hold for very long (which will then also become very large amounts probably).

Wallets with Multi Signature Support

For Bitcoin: Sparrow, Electrum

Most Electrum forks (for example Electrum-LTC for LTC) will also support Multi Signature.

The elephant in the room: Ethereum

As I said, ETH doesn't offer a "native" Multi Signature functionality because that's what the smart contracts are made for - so you need to set it up using a smart contract, which is more complicated than shown here for BTC or similar currencies.

If you really feel like you need one, according to the ETH foundation and their wallet finder tool, the following wallets support Multi-Signature and hw-wallets:

Web3Auth, Loopring Wallet, Ambire, Argent, Safe

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tl;dr: You can create Multi Signature Wallets using mutliple hw-wallets to not trust a single company with your crypto. While this is certainly nothing for mainstream adoption, it can be considered when storing large amounts or for very long durations.