So https://github.com/coreos/fedora-coreos-tracker/issues/18 just seems to be about the partition layout mostly. I see no finished advice/guide on how to do it. It was also linked to this issue, which is basically want I want to achieve, but there is no solution there yet, as far as I see.
Where the password/key comes from is another discussion. Basically I would already be satisfied with the usual graphical/text input, so when you attach a keyboard you can enter it. (Again, just as you know it from your desktop/laptop.)
Clever alternatives like SSH input or even TPM are also nice to suggest, but they usually require much (low-level-)fiddling and may easily fail/break…
As such, I’d really want a stable/proven, but secure way, so IMHO the “password input” is the best one currently available.