A quick recap on recovery paths

Most bitcoin wallets, once created, define only one way of spending coins, typically either using a single key (a single-sig wallet) or multiple keys in a multisig setup (2-of-3, 3-of-5, etc.). Although a multisig wallet allows some flexibility in choosing which subset of keys to use when spending coins, the set of available keys and the threshold, once defined at wallet creation, never change.

A Liana wallet, by contrast, contains a primary path and one or more recovery paths that use relative timelocks and make it possibile for additional conditions to spend coins in the wallet to become available over time.

Each of these paths comprises one or more keys in the same way as a traditional wallet. While the primary path is always available and can be used for spending coins at any moment, the recovery paths become available only after specified periods of inactivity (see Understanding Bitcoin Timelocks: Security Without the Wait for more information about how relative timelocks work).

Monitoring recovery paths

For many use cases, such as inheritance or protection against key loss, the recovery paths are intended for exceptional circumstances and their activation should be avoided in order to reduce the chance of a recovery key holder, such as a family member or Safety Net provider, gaining premature access to funds. It is therefore important to monitor recovery paths in Liana to see how much time is remaining until they become available.

Liana helps users monitor these recovery paths in various ways within the wallet. In addition, Liana Business users are notified by email whenever a recovery path is either approaching activation or activates.

Below, we’ll use an example wallet with the following policy:

This is a “decaying multisig” type of wallet: the primary path is a 2-of-2 multisig that becomes a 1-of-2 multisig after approximately six months. If both keys A and B are lost, there is a second recovery path available after one year that requires a single backup key to recover funds.

Within the wallet

The Home page shows the approximate time left until the first recovery path becomes available:

This can be seen in more detail on the Coins page, where the approximate time remaining until the first recovery path becomes available is shown for each coin, as well as the corresponding number of blocks:

In case there is less than 10% of the first recovery path’s timelock remaining, or the first recovery path is already available, a different message is shown on the Home page:

Again, the Coins page shows the updated information for each coin:

Since no timelocks have expired, there are still no recovery paths available on the Recovery page:

Once the first recovery path is available, this is also indicated on the Coins page:

In order to reset the recovery path’s timelock, either before or after activation, the coins can be refreshed by clicking on the “Refresh coins” button on the Home page or choosing “Refresh coin” for a specific coin on the Coins page.

This allows to create a transaction that sends the coin(s) back to the same wallet, thereby resetting the timelock:

In case it were no longer possible to spend on the primary path, e.g. because one of keys A or B had been lost, it would be possible to recover the funds using the Recovery page:

See also How to recover the funds if I lose my key? for further information about the recovery process.

In case both keys A and B had been lost, then it would be necessary for the second recovery path to become available and recover funds using the backup key:

Email notifications

To ensure that Liana Business users remain aware of the state of their recovery paths even when not using their Liana wallet directly, they receive email notifications when a recovery path is either approaching activation:

Or when the path has already been activated:

This allows them to take prompt action to refresh timelocks or recover funds as required.

tl;dr

Liana uses recovery paths to enable bitcoin self-custody that is resilient to failure, loss or change. Knowing how to manage these recovery paths in your Liana wallet ensures they are only activated when required and work as intended.

Recovery paths can be monitored within your Liana wallet on the Home and Coins pages. In addition, Liana Business users receive email notifications when a recovery path is approaching activation or activates.

Coins can be refreshed to reset timelocks and prevent recovery paths becoming available. Otherwise, if it’s no longer possible to use the primary path, funds can be recovered using one of the available recovery paths.