nLocktime is a type of timelock script that was used in previous versions of Blockstream Green to ensure that you could recover the funds in your Bitcoin 2-of-2 wallet in the event that you lose access to all of your two-factor authentication (2FA) methods or Blockstream’s servers became unavailable.
On Monday, January 25th, 2021, Blockstream Green switched from nLocktime to CheckSequenceVerify (CSV) for the timelocks used in the multisig security for Bitcoin 2-of-2 accounts. CSV is a different type of timelock script that makes the recovery process more straightforward by removing the need for an email address. You can read more about the mechanics of the change in this article.
Note: If you are using a wallet created before Jan 25th, 2021, it is possible that there are still funds in your wallet that are secured by nLockTime. These funds will be automatically migrated to CSV timelocks as you continue to use the wallet.
How nLockTime Timelocks Work
Your Bitcoin 2-of-2 wallet requires signatures from two private keys for any outgoing transaction: one of those private keys is held by you on your device and protected by your PIN code (with your mnemonic backup), while the other key is held on the Blockstream servers and protected by your selected two-factor authentication (2FA) method.
nLockTime works as a "plan B" to help obtain the second signature in the event you lose access to your 2FA method or are unable to access Blockstream's servers.
The recovery process via nLockTime uses pre-signed transactions generated by the Blockstream servers. If you have set an email address for recovery in your wallet’s settings, these pre-signed transactions will be emailed to you whenever you make a transaction.
Note: You must set an email address in advance to be able to recover a Bitcoin 2-of-2 account.
If you have not made any transactions within the nLockTime period (12,960 Bitcoin blocks, or 90 days by default), the nLockTime transactions can be used to move your funds without requiring a signature from the second key on the Blockstream servers.
To ensure that your wallet is always secured by 2FA, the app will request a redeposit for any funds that haven’t moved for the duration of the timelock period.
Note: nLockTime is only used for Bitcoin 2-of-2 wallets. Liquid wallets only use CSV, and Bitcoin 2-of-3 wallets do not require timelock as you can always combine your third backup key with the key on your device to recover your funds.
How to Find Out If Your Wallet Still Uses nLockTime
Whether your funds are secured by CSV or nLockTime depends on whether you have been using your wallet before January 25th or not.
If You Used Your Wallet Before January 25th, 2021
You will most likely have a mix of nLockTime- and CSV-secured funds in your wallet for some time.
Any funds sent to your wallet before January 25th are secured by nLockTime. Any new transaction you receive after January 25th automatically uses CSV, so long as your Blockstream Green application is updated. Your existing funds will be migrated from nLockTime to CSV as you spend them.
Warning: You must have email notifications enabled for your account in order to make use of the timelocks associated with nLockTime-secured funds. If you have not associated an email address with your account and lose access to your 2FA methods or Blockstream's servers, you could lose these funds. CSV timelocks cannot be used to recover nTimeLock-secured funds.
If You Created a Wallet After January 25th, 2021
If your Blockstream Green application is up to date, your wallet doesn't use nLockTime timelocks. All transactions you receive will be on CSV.