Splitting a mnemonic code or seed like that is not a good idea at all.
Using a secret sharing scheme is superior since it does not leak any information about the secret at all.
Using a secret sharing scheme is superior since it does not leak any information about the secret at all.
Right, but the secret sharing scheme has two main issues: 1) amnesia (you forgot where did you store one of the 3-4-5 pieces) and 2) what if one of the pieces is somehow damaged.
If you consider your wallet instantly compromised and lost as soon as someone has access to the mnemonic code (which in itself is correct), then you also should instantly consider all coins gone if wallet A is lost.
You shouldn't differentiate here.
Based on this, the coins would be lost before you could even broadcast the raw transaction.
You shouldn't differentiate here.
Based on this, the coins would be lost before you could even broadcast the raw transaction.
Exactly! This is why you most probably need to destroy the private keys of wallet A right after you signed the transactions.
This way, you only store private keys of wallet B (or simply use wallet B on a custodial exchange / wallet where you can login every time because you previously made the KYC) with 0 balance. With the custodial wallet, there is no risk of the exchange being hacked, because you don't store anything there, you will only use the wallet B if you'll ever need the backup. Best is to sign the same UTXO to more than one address and if you'll ever need the backup transaction just simply broadcast the one that you can surely access. Further, this only works if you do not make any transaction after signing that "backup transaction".
Once a transaction is done, the transaction will be invalid.
So, in your case, this backup transaction has to be done after each transaction making it quite inconvenient.
Once a transaction is done, the transaction will be invalid.
So, in your case, this backup transaction has to be done after each transaction making it quite inconvenient.
I am aware of this, read the entire post please. This is why after every transaction (incoming or outgoing), the wallet itself should sign the remaining (unspent) UTXO-s and send the signed transaction to the external service (via an API). Otherwise, this has to be done manually which is definitely inconvenient as you explained. But for a "saving account" (just to use a banking term, that you do not use quite often to spend from it, this could work quite well.