Setting Up a Cold Wallet with MultiSig: Questions

Hey all, I have a quick question that’s been bugging me. I want to set up a cold wallet using Electrum on a computer that’s completely offline, and I’d also have a watch-only wallet on my online computer. My plan is to create a transaction on the watch-only, then transfer that file to the offline computer to sign it there.

So here’s what I need to know: 1) Do all hardware wallets used for MultiSig need to support PSBT? 2) Can I use Trezor or BitBox, or are they no-goes?

You might find it handy to check out the hardware wallets that support multisig. Check out Jameson Lopp's multisig signing test. Usually, you'd connect your hardware wallet to an online wallet like Electrum for transactions. Just so you know, they do support PSBT.

Got it, so I create the transaction on the online Electrum, export the transaction file and move it to my airgapped Electrum ColdWallet. After signing it with Trezor or BitBox, I’d export again to the watch-only and send it out. Just to clarify, do I need to set up Trezor or Bitbox online first, or can I do it offline?

Yeah, that’s accurate for airgapped devices. But Trezor and Bitbox aren’t airgapped, they need to connect to an online wallet first. When you connect, your seed phrase stays safe. I prefer a full airgapped setup myself, though.

So basically, it looks like Coldcard, Passport, and Keystone are the only true airgapped options. SeedSigner doesn’t play nice with Electrum, and Jade has issues with updates.

Can I connect Trezor or Bitbox to the WatchOnly for signing, then finalize it on the Electrum ColdWallet?

Trezor is not an airgapped wallet. It needs an online connection like Electrum to operate. But don’t stress too much, all the back and forth with wallets isn’t a huge deal. You can still do a watch-only setup but might not need it this way.

I’m confused about needing internet just to sign something. For example, Jade doesn’t require it. Is it possible to connect Trezor with the airgapped Electrum for signing or am I missing something?

You don’t need internet to sign, but to actually broadcast transactions, you do. Jade works with Blockstream Green for this. You sign offline but need internet to push it. Trezor works fine with airgapped Electrum setups, but if Trezor doesn’t share its private keys, what’s the point of using airgapped wallets anyway?