A Taproot Simple Inheritance example with Krux and Liana

TR_Simple_Inheritance_Krux_Liana.md

Liana Simple Inheritance Taproot Miniscript Wallet with Krux

Overview

This guide details how to set up a Taproot miniscript wallet using:

• Krux: For key creation, backup, and transaction signing.
• Liana Wallet: For creating a “Simple Inheritance” wallet that uses the keys generated on Krux.

The process involves key management, backups, and data exchange via an SD card.

Step-by-Step Guide

1. Prerequisites & Preparation

• Required Items:
  • Krux with firmware v25.03.0
  • Liana Wallet v9
  • An SD card
  • A text editor (for transferring data between the SD card and Liana)

2. Key Creation & Backup on Krux

• Create a key on Krux.
• Back up the key and record its fingerprint.
• Reset Krux and test your backup by reloading the key.
• Customization during Loading:
  • Press “Customize” to change the policy type to miniscript.
  • Choose Taproot as the script type.
• Post-Loading Adjustments:
  • Its also possible to Change wallet attributes later in “Wallet -> Customize” and to set defaults in “Settings -> Default Wallet” immediately after boot.

2.1 Exporting the Main XPUB

• With the wallet loaded and configured:
  • Insert an SD card.
  • Navigate to "Extended Public Key" → "XPUB - Text" → "Save to SD card".
• This exports your primary key, which can sign transactions whenever needed on this setup.

3. Creating an Heir Key via BIP85

• Deriving a BIP85 Child Key:
  • Go to "Wallet" → "BIP85" and press "Yes".
  • Choose "BIP39 Mnemonic" (select between 12 or 24 words).
  • Choose an Index (using 0 is suggested).
  • Record and back up the heir's key and fingerprint, then press "Yes" to load it.
  • After loading child key, you can use other Krux backup formats.

3.1 Export the Heir's XPUB:

• Once loaded, export the heir’s XPUB via "Extended Public Key" → "XPUB - Text" → "Save to SD card".

Note: To use BIP85 for heir's key is just a suggestion for a quick setup, heir's key can be generated with its own entropy instead of being deterministically derived.

4. Setting Up the Wallet in Liana

• Open Extended Public Keys on PC:

  • Insert your SD Card on computer and load Extended Public Keys on a text editor.

• Creating a New Wallet:

  • Open Liana and select "Create a new Liana wallet" → "Simple inheritance".
  • Read the briefing and click "Next".

• Configuring Keys:

  • In the "Set keys" window, click "Advanced setting" and change the "Descriptor type" to "Taproot".
  • Primary Key:
    • Click "Set" and choose "Enter an extended public key".
    • Copy the primary XPUB from your text editor and paste it into Liana.
    • Assign a recognizable name to the primary key.
  • Heir's Key:
    • Set the time period after which the heir’s key can recover funds. For testing purposes, set a short expiration time (e.g., a few hours) to quickly simulate expiration and validate the recovery procedure.
    • Paste the heir’s XPUB into Liana.

• Wallet Descriptor Backup:

  • Liana will generate a wallet descriptor.
  • Copy the descriptor to a text editor and save it as a .txt file on your PC.
  • Save an additional copy on the SD card for verification on Krux.

5. Final Steps & Transaction Signing

• Liana Connect Setup:
  • After backing up the descriptor, click "Next".
  • Choose "Use Liana Connect" for testing purposes.
  • Provide your email and authenticate with the token sent to you.
• Wallet Operation:
  • Once the wallet is loaded, you can check your balance, generate receiving addresses, and manage settings.
  • Creating & Signing Transactions for Primary Key:
    • Create a PSBT (Partially Signed Bitcoin Transaction) in Liana.
    • Copy the PSBT to a text editor, save it on the SD card, and sign it using Krux.
    • Load the signed PSBT back into the text editor, then copy it into Liana to finalize and broadcast the transaction.
  • Creating & Signing Transactions for Recovery Key:
    • After a utxo has expired, Create a PSBT via Settings —> Recovery, then follow the same process as above.