What is Multisig Wallet ?
Today we’re going to Discuss What is Multisig Wallet and How does it Works ?
What is Multisig Wallet?
Multisig stands for multi-signature, which is a specific type of digital signature that makes it possible for two or more users to sign documents as a group. Therefore, a multi-signature is created by combining multiple unique signatures. Multisig technology exists in the cryptocurrency world, but the principle is one that existed long before the creation of Bitcoin.
In terms of cryptocurrencies, the technology was first applied to Bitcoin addresses in 2012, which eventually led to the creation of multisig wallets, a year later. Multisig addresses can be used in different contexts, but most use cases are related to security concerns. Hence we discuss their use in cryptocurrency wallets.
How does it work ?
As a simple analogy, we can imagine a safe deposit box with two locks and two keys. Alice holds one key and Bob holds the other key. The only way they can open the box is if they provide both of their keys at the same time, so one cannot open the box without the other’s consent.
Basically speaking, funds stored at a multi-signature address can only be accessed using 2 or more signatures. Therefore, using a multisig wallet enables users to create an additional layer of security to their funds.
