Multisignature Wallets: Securing Crypto Through Consensus

Multisignature is a signature required in multisignature cryptocurrencies.

What is Multisignature?

When transferring money from your wallet, you need to create a transaction and sign it. The transaction signed by you is confirming that the owner of those money, you have the key to dispose of them and your approve the transaction.

When you are trying to understand how multi-signature works, you need to consider a single signature. Because the single-signature crypto wallet is a single-signature, it only needs one signature to sign a transaction, and that’s easy to understand. The wallet multi-signature is a type of bank that uses more than one sign to register the transaction.

A multi-signature wallet is a wallet shared by two or more users, they are called co-signers. According to the type of wallet, the number of signatures needed to sign a transaction is usually less than or equal to the number of co-signers on the wallet.

Speaking of multiple signature wallet capabilities, all co-signers can see the funds as well as the wallet’s multiple signature transactions. This type of wallet assumes that one or more co-signers must sign a transaction in order to send funds out of the wallet, and this feature increases the security of your funds. A unique recovery phrase is also set up for each of the co-signers; however, if one of the recovery phrases is lost, there could potentially not be enough co-signers to sign the transaction, and without enough co-signers to sign the transaction, you cannot spend your wallet funds. While this adds a higher level of security, it also adds a higher level of risk associated with it.

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