Create the multisig wallet

What you need

• Your signing computer with Sparrow installed and verified (step 3)
• Three initialised hardware wallets (step 4)
• All three seeds on metal (step 5)

Steps

1. In Sparrow, choose File → New Wallet and give it a short name, for example Vault 2of3. The Ledger shows this name when you register the wallet, so keep it short and easy to recognise.
2. Set Policy Type to Multi Signature, the cosigners to 2 of 3, and Script Type to Native SegWit (P2WSH).
3. Connect the first device and unlock it. Using a passphrase? Unlock the passphrase wallet. On the Ledger, also open the Bitcoin app.
4. In the first keystore tab, click Connected Hardware Wallet → Import Keystore and confirm on the device.
5. Check that the derivation path reads m/48'/0'/0'/2' and write down the master fingerprint next to the device letter from step 4.
6. Repeat for the other two tabs, a different device each time.
7. Click Apply and set a wallet password. It encrypts the wallet file on this computer, not your keys.

Output descriptor · example, shortened

wsh(sortedmulti(2,
  [a1b2c3d4/48h/0h/0h/2h]xpub6E…Q3x,
  [e5f6a7b8/48h/0h/0h/2h]xpub6F…k9L,
  [c9d0e1f2/48h/0h/0h/2h]xpub6D…m2P))

That descriptor is the recipe for your wallet: which three keys, the 2-of-3 rule and the address type. You’ll find it under the Settings tab of the wallet.

Want two separate vaults?

Say one for business and one for personal savings. You can use the same three devices. Build the second wallet with account 1 instead of 0, so the path becomes m/48'/0'/1'/2'. The fingerprints stay the same, the xpubs change. Finish the first vault completely, backups and test included, before you start the second. A 0 left where a 1 should be gives no error, just a second copy of the same wallet.

Common mistakes

• Importing the same device twice instead of three different devices.
• Forgetting to unlock the passphrase wallet on one of the devices.
• Moving on before the descriptor is backed up.