How Does an M-of-N Scheme Differ from a Standard Single-Key Wallet?

A standard single-key wallet relies entirely on one private key for all transaction authorization; its compromise means total loss of funds. An M-of-N multi-sig scheme requires M keys out of N total keys to authorize a transaction.

This distributed key ownership model eliminates the single point of failure inherent in the single-key wallet. The multi-sig wallet's security is derived from consensus, while the single-key wallet's security depends solely on the protection of that one key.

This fundamental difference makes multi-sig far more secure for large holdings.