What Is a ‘Multisig’ Wallet and How Does It Enhance Security?
A multisig (multi-signature) wallet is a cryptocurrency wallet that requires two or more private keys to authorize a transaction. This enhances security by distributing control among multiple parties or devices, eliminating the single point of failure associated with a single private key.
An attacker would need to compromise multiple keys, not just one, to access the funds. This setup is ideal for businesses or groups managing shared assets.
Glossar
Cryptocurrency Wallet
Asset Access Point ⎊ A Cryptocurrency Wallet is a software or hardware interface that securely stores the private keys necessary to access and manage digital assets held on a blockchain network, enabling the authorization of transactions.
Single Point of Failure
Concentration ⎊ In crypto derivatives, this risk materializes when excessive collateral or governance control resides with a small number of entities, such as a few large liquidity providers or key developers.
Multisig Wallet
Security ⎊ Multisig wallets represent a cryptographic advancement in digital asset custody, demanding multiple private key authorizations to execute a transaction, mitigating single points of failure inherent in traditional single-signature schemes.