A $5 wrench attack happens when someone uses physical force to make you give up your Bitcoin. Even the best digital security can’t stop someone with a wrench demanding your password. To protect yourself, decoy wallets are a smart solution. These are wallets with a small amount of Bitcoin designed to fool attackers into thinking they’ve taken everything.
Key Takeaways:
- What’s a $5 Wrench Attack? Physical threats to force access to Bitcoin wallets.
- Why Bitcoin Holders Are Targets: Bitcoin transactions are irreversible and anonymous, making them appealing to criminals.
- How Decoy Wallets Work: Present a fake wallet with minimal funds to satisfy attackers.
- Types of Decoy Wallets:
- Passphrase-protected wallets.
- Hardware wallets with duress PINs.
- Multisig wallets with decoy setups.
- Additional Security Tips: Practice privacy online, secure your hardware wallets, and consider tools like BitVault for advanced features like secret notifications.
Bottom Line: Setting up a decoy wallet can protect your main Bitcoin holdings during a physical attack. Combine this with strong privacy habits and advanced wallet features to stay safe.
How To Hide Your Bitcoin From Thieves (Decoy + Hidden Wallet)
How Decoy Wallets Protect Against Physical Attacks
Decoy wallets are a clever way to protect your Bitcoin holdings during physical attacks. By presenting a small, believable amount of Bitcoin, they can mislead attackers and shield your main stash.
What is a Decoy Wallet?
A decoy wallet is a Bitcoin wallet set up with a small amount of funds designed to trick attackers into thinking they’ve accessed all of your Bitcoin. As Turbosloth from Bitcoin Magazine puts it:
"A decoy wallet is one that you load with enough bitcoin to satisfy a thief, but not so much that you wouldn't be willing to sacrifice it in an emergency" [2].
The idea is simple: plausible deniability. Even if you’re forced to hand over access to a wallet, the decoy ensures only a small portion of your Bitcoin is at risk. Experts suggest funding these wallets with a minor percentage of your total holdings, just enough to appear convincing [3]. Let’s look at the three main types of decoy wallets and how they work.
3 Types of Decoy Wallets
Passphrase-Protected Decoy Wallets
These wallets use the same seed phrase as your main wallet but are locked behind a different passphrase. If you’re in a threatening situation, you can reveal the decoy passphrase while keeping your primary wallet safe and untouched.
Duress PIN Systems
Some hardware wallets, like the Coldcard Mk3, come with a duress PIN feature. Entering this special PIN triggers access to a decoy wallet instead of your main holdings [2]. This makes it easy to provide a "wallet" under pressure without exposing your real funds.
Multisig Decoy Configurations
Multisig setups can include decoy keys to create a convincing but less secure wallet. This setup not only hides your primary security measures but also gives attackers a realistic target.
Each of these methods plays on attackers’ assumptions, ensuring the decoy wallet looks legitimate enough to buy you time or defuse the situation.
Why Decoy Wallets Work
In physical attack scenarios, decoy wallets are an effective defense against the infamous "$5 wrench attack" - a term used to describe coercion tactics where attackers force you to reveal your Bitcoin wallet. Decoy wallets work by exploiting attackers' limited technical understanding. If forced to reveal a wallet, offering a decoy with a modest balance can often satisfy demands and prevent further escalation.
In October 2024, Nunchuk introduced a practical solution with their Decoy Wallet feature. Their mobile app allows users to set up separate wallets, each accessible via unique PINs. This means you can present a wallet with minimal funds in high-pressure situations while keeping your primary holdings secure.
While decoy wallets are an effective layer of protection, they’re not foolproof. If an attacker suspects the decoy doesn’t hold the full amount, they may persist. For this reason, decoy wallets should always be part of a larger, well-thought-out security strategy.
How to Set Up a Decoy Wallet
Setting up a decoy wallet is all about creating a Bitcoin wallet that looks legitimate while keeping your primary funds secure. The idea is to make it convincing enough to fool anyone who might coerce you into handing it over, without jeopardizing your real holdings. Here's how you can do it.
Creating Your Decoy Wallet
Start by setting up a completely separate wallet with its own unique seed phrase and keys. Use entirely different credentials to ensure there’s no overlap with your primary wallet.
If you're using a hardware wallet, some brands like Coldcard offer specialized duress PIN options. These include features to unlock a decoy wallet, destroy the seed, or even activate a "brick mode" that disables the device entirely[6]. For software wallets, Edge introduced a Duress Mode in May 2025. This feature lets you access a decoy account with a separate PIN, hiding your real wallets and balances while still allowing verifiable on-chain transactions[5].
Once your decoy wallet is set up, the next step is to make it look convincing.
Making Your Decoy Wallet Look Real
For your decoy wallet to work, it needs to appear active and authentic. A few key steps can help you achieve this without putting your main wallet at risk.
- Allocate a believable balance: Fund the wallet with an amount that seems valuable but is expendable. Remember, this wallet is meant to act as bait in a high-pressure situation, not as a backup for your main holdings[5].
- Simulate regular activity: Conduct occasional transactions to create a realistic history. Be cautious, though - never transfer funds between your decoy and primary wallets. Doing so could link the two and compromise the illusion.
- Choose a convincing name: Use a name like “Main” or “Mike’s BTC Wallet” instead of something obvious like “Decoy” or “Emergency.” This small detail can make a big difference.
- Use different software or hardware: To further separate your decoy wallet from your primary one, consider using entirely different wallet tools or devices.
With these steps, your decoy wallet will blend seamlessly into your overall security setup.
Using BitVault for Decoy Wallet Security
BitVault offers advanced features that can enhance the security of your decoy wallet. For example, it provides time-delayed transactions and multisig functionality, which can buy you time to alert trusted contacts if you’re ever forced to use the wallet.
One standout feature is BitVault’s secret notification system. It sends alerts via Telegram whenever a transaction is initiated[7]. If someone coerces you into using your decoy wallet, your trusted contacts will be notified immediately, allowing them to check on your safety.
The multisig setup adds another layer of protection. By configuring it so that revealing one key only grants access to the decoy funds, your primary assets stay locked behind a more secure arrangement. This approach ensures you can present the decoy funds to diffuse a tense situation while keeping your main holdings untouched[3].
Lastly, make sure to test your duress PIN every six months. This helps ensure you can recall it quickly and use it effectively under pressure[8].
Other Ways to Prevent Physical Bitcoin Attacks
Protecting your Bitcoin from physical threats requires more than just decoy strategies. A well-rounded security approach - combining privacy measures, advanced wallet protections, and physical safeguards - can help deter attackers and bolster your defenses. Let’s dive into these critical layers of protection.
Privacy and Operational Security (OpSec)
Your online presence can expose you as a potential target long before an attacker makes a move. Operational security (OpSec) is all about keeping sensitive information out of the wrong hands. And the stakes are high: North America reported 48 confirmed physical attacks on crypto users between 2019 and May 2025, with 15 kidnapping cases targeting crypto holders in just the first five months of 2025 [1].
"Privacy is the power to selectively reveal oneself to the world." – Eric Hughes, A Cypherpunk's Manifesto [10]
Keeping your Bitcoin ownership private is essential. Avoid sharing wallet balances, transaction details, or anything crypto-related on social media. Public discussions - whether in person or online - can inadvertently link your identity to your assets, making you a target [1][11]. Criminals are constantly scanning for such oversights, ready to exploit them [1].
Here’s how to safeguard your privacy:
- Set social media accounts to private and disable geolocation features.
- Avoid sharing travel plans or current locations until you’ve moved on.
- Use encrypted messaging apps like Signal for sensitive communications instead of standard texts or emails [11].
In your daily life, practice situational awareness and mix up your routines to avoid predictable patterns. If you manage significant holdings, consider hiring professionals to conduct a security audit of your home or office [1]. Above all, don’t fall into the trap of thinking, “It won’t happen to me.” Complacency is one of the biggest threats to your safety [10].
By combining privacy practices with advanced wallet security, you can create a more resilient defense.
Advanced Wallet Security Features
Modern wallets come equipped with features designed to thwart attackers - even under duress. Tools like time-delayed transactions, multi-signature (multisig) setups, and secret notifications can add extra layers of protection to your funds.
For example, multisig wallets require multiple keys to authorize a transaction, making it nearly impossible for an attacker to access your Bitcoin with just one compromised device. BitVault’s security architecture is a great example of this, offering time-delayed transactions, multisig capabilities, and secret notifications to keep your assets safe.
Here are some additional wallet security tips:
- Enable biometric logins and multi-factor authentication (MFA). Use authenticator apps, not SMS, for added security [12].
- Set up transaction alerts and regularly review your transaction history to catch any unauthorized activity [12].
- Never store private keys or seed phrases online. Remember, wallets store your private keys - not the coins themselves. Losing your keys means losing access to your funds [12].
These digital safeguards create critical barriers, even in situations where physical threats are present. However, your defenses won’t be complete without securing your hardware devices.
Securing Hardware Wallets and Devices
Physical security for your hardware wallet is just as important as digital safeguards. Start by keeping your cryptocurrency ownership private. If you must discuss it, downplay the value of your holdings [13].
"Hardware wallets empower you with self-custody of your crypto. That means absolute ownership and control of your coins, tokens, and NFTs. But with great power comes great responsibility: self-custody requires a firm understanding of your environment and the risks you face. Using a hardware wallet doesn't make you invincible against social engineering, physical threats, or human error." [13]
Write your recovery seed phrase on paper and store it in a bank safety deposit box. For large holdings that you don’t need frequent access to, consider storing the hardware wallet itself in a bank vault [13]. To add an extra layer of security, split your seed phrase into multiple parts and store them in separate, secure locations [14].
Additional tips for securing your hardware wallet:
- Use strong PINs and passwords, and store the device in a fireproof safe when not in use [14][15].
- When traveling, keep your wallet close and avoid leaving it in easily accessible locations [14].
- Back up your wallet regularly, encrypting backups and storing them on multiple devices in secure locations [16].
- Conduct periodic security audits to identify and address potential vulnerabilities [12].
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Protecting Your Bitcoin from Physical Threats
Safeguarding your Bitcoin from physical threats requires more than just one layer of defense - it’s about creating a system that makes it incredibly difficult for attackers to succeed. Physical Bitcoin attacks are not uncommon [4], so having a well-thought-out plan is essential.
One effective tactic is using decoy wallets. These wallets hold a small amount of Bitcoin to appease potential attackers, while your main assets remain secure elsewhere. Think of it as your first line of defense, buying you time and protecting the bulk of your holdings.
Preparation is key. Set up your decoy wallet in advance, implement multisignature protections, and establish clear protocols for what to do in case of an incident. With Bitcoin hitting new all-time highs, the risk of becoming a target increases [9], so planning ahead is more important than ever.
Tools like BitVault can elevate your security strategy. For instance, its time-delayed transactions give you a critical window to respond if your keys are compromised. Multisignature features ensure that no single point of failure exists, while secret notifications and customizable delays work seamlessly with decoy wallet strategies. These features create multiple layers of protection, giving you more control during an attack.
Additionally, store your seed phrases in a different location from your hardware wallets, and practice strong operational security habits. This minimizes the chance of becoming a target in the first place.
FAQs
How can I make a decoy wallet look realistic to deter potential attackers?
To make a decoy wallet believable, fill it with items that mimic what people typically carry. Include a small amount of cash - maybe a $20 bill on top of a couple of $1 bills. Toss in some expired credit cards, used gift cards, or old loyalty cards. Choosing an older, slightly worn wallet can also help sell the illusion.
Keep it simple, though. Avoid stuffing the wallet with too many items or making it too bulky, as that might draw unwanted attention. The idea is to create something that looks like it belongs to someone going about their day - ordinary enough to be a convincing target, without putting your actual valuables at risk.
How can I protect myself from a $5 wrench attack and keep my cryptocurrency secure?
How to Protect Yourself from a $5 Wrench Attack
If you want to shield yourself from a $5 wrench attack, the key is to prioritize your privacy and tighten up your operational security. Start by keeping a low profile. Avoid talking about your cryptocurrency holdings in public or flaunting anything that might hint at your wealth - like crypto-branded merchandise or high-end gadgets. The less attention you draw, the less likely you are to become a target.
Another smart move is using a decoy wallet. This is a wallet that holds a small, non-critical amount of cryptocurrency. In case you're ever pressured, you can hand it over without compromising your main funds. To take things further, set up a multisig wallet. This type of wallet requires multiple keys, stored in different locations, to authorize any transaction. It’s a lot harder for someone to gain access to your assets this way.
Finally, be vigilant about your operational security (OPSEC). Pay attention to your habits - both online and offline - that might expose sensitive information. Use strong authentication methods for all your accounts, and make sure your physical and digital security measures are solid and up to date. By combining these precautions, you can significantly lower your risk of physical attacks and keep your assets secure.
How do features like multisignature wallets and time-delayed transactions help protect my Bitcoin from theft?
Advanced Wallet Features for Enhanced Bitcoin Security
Features like multisignature setups and time-delayed transactions offer powerful ways to protect your Bitcoin.
Multisignature wallets require more than one private key to approve a transaction. This reduces the chance of theft by removing single points of failure. In simple terms, even if one key is compromised, your Bitcoin stays safe because additional keys are still needed to authorize any movement of funds.
Time-delayed transactions add another layer of defense. They create a waiting period before any transfer is completed, giving you a chance to step in and stop unauthorized activity if someone gains access to your wallet. This feature can prevent immediate losses by allowing you to act before any damage is done.
Together, these tools provide a strong defense against both digital and physical threats, giving you greater confidence in securing your Bitcoin.
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