What Is Multisig?
Also known as: Multi-Signature, Multisignature, Multisig Wallet, Multi-Signature Wallet
In short
Multisig (multi-signature) is a wallet or account structure that requires signatures from multiple private keys for a transaction to go through; for example, in a 2-of-3 setup, approval from any two of the three keys is enough.
Multisig setups are usually expressed as m-of-n: n indicates the total number of keys and m the minimum number of signatures required for a transaction. On Bitcoin, multi-signature is supported directly through the protocol's own scripting language (Bitcoin Script). On Ethereum and similar networks, multisig wallets are implemented as smart contracts; Safe (formerly Gnosis Safe) is a widely used solution in this area.
Multi-signature prevents the loss or theft of a single key from leading to a loss of funds. For this reason, it is preferred by DAO treasuries, project teams' funds, cold wallets of cryptocurrency exchanges and individuals who want to secure large amounts. For example, a user who stores their keys on different devices and in different locations can still access their funds with the remaining two even if they lose one key in a 2-of-3 setup.
Multisig also has limits. Setup and management are more complex than single-key wallets; if the keys are kept in the same place, or if signers sign without verifying the content of the transaction they approve (blind signing), the protection loses its meaning. In smart contract-based solutions, contract bugs and compromise of the interface used are separate risks.
Last updated: · This content is for information purposes only and is not investment advice.