March 26th 2014
For most people creating a wallet is the single most important step on their journey into Bitcoin. At MultiBit we have worked hard to make this process as smooth as possible while not sacrificing on security.
Here is a preview of the MultiBit HD Welcome Wizard that will guide new users through this process. Bear in mind that this is an early preview so the final result may change cosmetically.
Also, this wallet is being created "in app" so that we can show the flexibility that MultiBit HD gives users for representing Bitcoin amounts in different styles and across a range of currencies. Normally a user opening MultiBit HD for the first time would have a zero balance displayed.
Naturally, the first step in this process is to select a preferred language but that was already shown in the previous article.
MultiBit HD will support hardware wallets such as the Trezor but in its first outing it will start with BIP32 hierarchical deterministic wallets (HDW). Anyone creating their own hardware wallet and wanting to integrate it into MultiBit HD should take a look at the MultiBit Hardware project on GitHub. It's still early days but a fair amount of the ground work is in place to simplify the integration process.
Keeping continuous automatic encrypted backups provides peace of mind when dealing with Bitcoin. By selecting a backup location right at the outset the user can hand over management of these to the application. The old adage that "data does not exist unless it is in two places" should be firmly in people's minds so we recommend that people select a managed backup location.
For security we prefer Spider Oak, but Dropbox, Time Machine, rsync and so on are also great choices. Anything that continuously copies the backups off the local machine and on to a different machine reliably is a good backup solution. MultiBit HD ensures that all backups are encrypted locally through PGP before being written to disk.
The whole purpose of hierarchical deterministic wallets (HDW) is to make the creation and control of keys much more straightforward than the earlier solutions. Everything in a HD wallet hinges on a seed phrase that is randomly generated for you. Of course if you don't like the words you can keep clicking refresh until you're ready.
To allow for interoperability with other wallets MultiBit HD strictly adheres to the BIP39 word list and uses the BIP32 address generation method. This means that the words shown above can be presented to any other BIP32/39 compatible wallet and it will be able to regenerate all the keys.
Users are free to choose between 12, 18 and 24 words in their seed phrase, although a seed phrase of 24 words contains more entropy than Bitcoin private keys themselves so might be considered overkill.
It is essential that users physically write down their seed phrase (and timestamp for efficient recovery if necessary). We believe that people are very good at protecting physical information, and not so good with digital equivalents. Consequently we strongly advise people to not attempt a copy-paste or screen shot, and obviously camera phones and printers are out. Having a paper copy which can be laminated and stashed in a fire-proof box is a great way to secure all your future addresses. Keep it secret, keep it safe.
So you did write those words down, didn't you? You will notice that there is no back button. This is deliberate. That seed phrase is vital to your ongoing security, without it you will lose access to your bitcoins and nobody wants that.
While your seed phrase protects all your bitcoins, it is a pain to have to enter it every time you simply want to access your wallet. To that end MultiBit HD uses a wallet password that locks your wallet from prying eyes and is required when spending. If you lose this password you can recover it from a backup using your seed phrase.
And that's how it's done.
We'd strongly urge other wallet application developers to use hierarchical deterministic wallets and to follow BIP32/39. Additionally, if we all adopt this initial workflow then users will get the same experience so they can help each other and everyone benefits from the ongoing interoperability.
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