Yeti 2.0 Protocol Setup Guide: 3-of-7 Multisig Vault with M-DISC & Airgapped Linux

Why Yeti 2.0? The Defense-in-Depth Philosophy

In Bitcoin self-custody, single-signature setups (even on reputable hardware wallets) introduce catastrophic vulnerabilities: home break-ins, single-seed extraction bugs, rogue firmware updates, supply chain interdiction, and physical disasters.

Commercial multi-vendor setups help, but they still bind your security to closed-source microcontrollers, proprietary USB communication stacks, and external vendor roadmaps. The Yeti Cold Storage Protocol takes a purist approach:

System Architecture Overview

Required Equipment Checklist

Before starting the setup, gather the required hardware and media. Make sure to keep the two USB drives clearly labeled so they are never swapped or confused during the process.

Step 1: Download, Verify, and Flash Ubuntu LTS

Security begins with an authentic operating system. Never install an unverified operating system on a node or signing device.

1. Navigate to releases.ubuntu.com and download the latest Long-Term Support (LTS) Desktop image (e.g., Ubuntu 24.04 LTS / 26.04 LTS).
2. On the same release directory, download the checksum files:
   • SHA256SUMS (right-click and save as a text document in your Downloads folder)
   • SHA256SUMS.gpg (GPG signature file)
3. Open Windows PowerShell (or a Linux/macOS terminal) and verify the SHA-256 hash against the official checksum file:

Open the downloaded SHA256SUMS text file and confirm that the calculated hash string precisely matches the published release hash.

Flashing the Boot Drive with Rufus

Plug in your 32GB OS Boot USB drive. Open Rufus (downloaded from official rufus.ie):

• Device: Select your 32GB USB flash drive.
• Boot selection: Select the verified Ubuntu Desktop ISO.
• File system: FAT32 (Default).
• Click START, accept the recommended ISO image writing mode, and confirm overwrite.

Step 2: Install Encrypted Ubuntu & Sync Bitcoin Full Node (Online PC)

Your online computer will serve as your sovereign archival full node and watch-only coordinator.

1. Insert the Ubuntu Boot USB into your online PC and power it on while pressing the boot menu key (typically F12, F11, or F2).
2. Select your USB flash drive and choose "Install Ubuntu".
3. During drive setup, enable Full Disk Encryption (LUKS) and create a strong encryption passphrase. Complete the timezone and user credentials setup.
4. Once finished, remove the USB drive and reboot into your freshly installed encrypted Ubuntu operating system.

Downloading and Verifying Bitcoin Core

Open the Ubuntu Terminal (Ctrl + Alt + T) and update system packages:

Confirm that the terminal returns bitcoin-28.0-x86_64-linux-gnu.tar.gz: OK. Next, verify the cryptographic builder signatures (e.g., maintainer keys like Ben Carman, Achow101, and others) to confirm "Good signature from...".

Bitcoin Core will launch in the background and begin the Initial Block Download (IBD), syncing the entire history of the blockchain to your 2TB SSD.

Step 3: Boot the Offline Amnesic Signer in Live RAM

Now, move to your second, dedicated offline computer (such as a $100 used ThinkPad).

1. Insert the Ubuntu Boot USB into the offline laptop and power it on while pressing F12.
2. Select the generic USB flash drive and press Enter.
3. When prompted with the installation options, select "Try Ubuntu" (NOT Install).
4. This initializes a live, amnesic Linux environment that runs completely inside the computer's volatile RAM memory.

Software Preparation & Complete Airgap Hardening

While temporarily connected to a clean network or before cutting connections, fetch the Yeti 2.0 instructions and install Brasero (the Linux optical disc authoring utility):

Step 4: Generate the 3-of-7 Multisig Keys & Export Watch Wallet

With the offline machine completely airgapped, start Bitcoin Core daemon locally in offline mode to generate your cryptographic master keys.

Execute the Yeti protocol script to create seven distinct descriptor wallets (key_1 through key_7). The script performs the following core cryptographic actions:

1. Creates 7 individual Bitcoin Core descriptor wallets using OS hardware entropy (/dev/urandom).
2. Captures the extended public key (xpub) and derivation path from each of the 7 wallets.
3. Constructs the unified 3-of-7 multisig descriptor wallet: multisig_watch_wallet.

Exporting the Watch-Only Wallet to the Transfer USB

Insert your 64GB Data Transfer USB drive into the offline laptop:

• Open the file manager and press Ctrl + H to reveal hidden folders.
• Navigate to ~/.bitcoin/wallets/.
• Copy the multisig_watch_wallet directory directly to the Transfer USB drive.
• Safely right-click and Eject the USB drive.

Security Note: The multisig_watch_wallet contains only public descriptors and xpubs. It holds zero private keys, making it completely safe to plug into your online computer.

Step 5: Burn 1,000-Year M-DISC Backups (Keys 1 to 7)

Now you will create the physical backup media that will protect your wealth for generations.

Sanitizing the Offline Environment

Once all 7 M-DISCs are burned, stop Bitcoin Core and purge local wallet files from the temporary memory:

Step 6: Import Watch-Only Multisig & Generate Receive Addresses

Move back to your online archival node. Plug in your Transfer USB drive containing the multisig_watch_wallet folder.

1. Copy multisig_watch_wallet from the USB into ~/.bitcoin/wallets/ on the online PC.
2. Load the wallet via CLI or launch the graphical Bitcoin Qt interface (./bitcoin-28.0/bin/bitcoin-qt):

Bitcoin Core will output your 3-of-7 multisig address (e.g. starting with bc1q...). In Bitcoin-Qt GUI, you can view the QR code under the Receive tab.

Send a small test deposit (e.g., $5 to $10 of Bitcoin) to this address and check your balance using:

Step 7: The Airgapped Signing Cycle: Construct, Sign & Broadcast

To spend from your 3-of-7 cold storage vault, you follow the airgapped Partially Signed Bitcoin Transaction (PSBT) workflow:

Step 8: Redundancy Testing & Geographic Distribution

Never deposit significant funds without thoroughly verifying every key.

Perform at least three test transactions using different 3-key combinations to confirm that all 7 M-DISC backups function properly:

• Transaction 1: Sign with Key 1 + Key 2 + Key 3.
• Transaction 2: Sign with Key 4 + Key 5 + Key 6.
• Transaction 3: Sign with Key 7 + any two other keys (e.g., Key 2 + Key 5).

Geographic Distribution of the 7 Envelopes

Once all keys are verified, place each M-DISC into an individual, opaque security envelope. Label them with nondescript identification, for example:

"Property of [Your Full Name]. Confidential personal backup media. In case of emergency or death, deliver unopened to [Next of Kin Contact Details]."

Geographically distribute the 7 sealed envelopes across distinct physical locations:

Routine Signing & Ongoing Maintenance Checklist

Whenever you need to sign a transaction in the future:

1. Boot the offline laptop from the Ubuntu Boot USB and choose "Try Ubuntu".
2. Disable network adapters (rfkill block all) and swap memory (swapoff -a).
3. Connect the optical drive, insert your chosen 3 M-DISC keys, load them into Bitcoin Core in RAM, and sign the transaction.
4. Copy the signed PSBT to your Transfer USB, unplug the drive, and shut down the offline laptop.
5. Broadcast the transaction through your online archival full node.