What Is Multi-Signature?
Multi-Signature sometimes referred to as ‘multisig,’ is a two-step verification whereby two or more signatures are required for a transaction to be ratified.
It is often used today in the case of cyber currency, Bitcoin, and other digital transactions.
As a result, authorizations on Bitcoin or other cryptocurrency transactions require multiple keys against a single signature from a single key.
Multisig transactions are also known as M-of-N transactions, where ‘M’ is the number of signatures or keys required and ‘N’ is the total amount of signatures or keys involved in the transaction.
It is a beneficial solution to consider, especially in co-ownership or security and potential loss concerns.
Multi-signature actions have long been fashionable, having been used in the past in religious circles where crypts holding the most precious relics of saints were secured by highly ranked monks such that those who were granted access to the tombs were only given partial keys to block the possibility of a loss of the relics to theft by a single monk.
Some wallets that have implemented the multisig option are Armory, Coinkite, Electrum, Blocktrail, Green Address, e.t.c. among others.
Some peculiarities of using multiple keys to secure a transaction are its applications in joint accounts, increased security, and backup.
For instance, single-signature transactions that are the standard ones on the Bitcoin network require only the owner of the key’s signature for transfers to be made, unlike in the case of multisig where different parties that could be individuals, institutions, or programmed scripts have to be aware and cooperate for the transactions to go ahead.
In some other cases, keys could be spread across devices, e.g., desktops, laptops, smartphones, or other hardware wallets such that if one gets compromised, the integrity of the funds is still preserved, and the security breach can be contained, primarily if different brands manufacture the devices.
The redundancy of the multisig backup system is the difference of n minus m. So, in a 3-of-4 wallet, there is a redundancy of 1, meaning the loss of any of the keys can be recovered from as the other keys can be used to recover the funds.
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