Multisig Wallet and How Useful is it
We all know that blockchain is a safe financial tool and holding assets. Storing assets in non-castodial wallets is safer than in custodial ones, and private keys are the power! But what if you have a company or a cooperative business and several people need to have access to the same wallet? Obviously, you can share a private key and trust your partners, but you can’t forget about data security in the digital space. After all, you can’t be sure that your companion won’t give the key to a third party or simply become a victim of theft. In this case, a multisig wallet is the right choice for you.
What is multisig
Multisig wallet literally means multi-signature wallet. It is a particular wallet that requires multiple signatures from owners to operate.
The plurality of owners is what keeps the multisig wallet so secure. Each of them has a unique private key, without them no transaction can be executed. As it turns out, the multisig wallet is one of the most secure options to hold assets in crypto.
Users set the value of each of their keys when creating a wallet. For example, one of the owners of a multisig wallet is the CEO of a company and the other two are his co-founders or deputies. In that case, the CEO’s value would be more important and a different could be set for it then the other two.
Commonly 2–3 signatures are used for such wallets, but there are also wallets, with a maximum number of signatures is up to 15. A certain number of signatures is required to make a transaction, login and other actions with the wallet. So comes the two patterns of the number of keys used: m out of n; n out of n. For example, a transaction requires 4 of 6 or 6 of 6 signatures to be activated. When you are creating a wallet, this parameter also can be changed and configured if necessary.
Who would be interested in a multi-signature wallet?
A multisig wallet is particularly safe from attack or theft because of the multiple signatures that are used. Even if one of the keys is lost or a third party gets the information, the funds in the wallet are still protected, because an intruder will not be able to enter using only one key.
A wallet is useful to a group of people as a contract or an agreement. If a company consists of three people, two of whom cannot decide on the amount and the sum, the third person will act as a judge who can decide as an independent party. If partners don’t trust each other, a pattern n out of n can be used, then every decision will be approved by all participants.
A multi-sig wallet is like a door with a code lock and a key lock. It will be impossible to open the door using only one of the keys. Just the code won’t open the door because the physical lock is closed, just as a key without the code won’t be able to help. And if each of the locks work together, the door will open.
In a multi-signature wallet the system works roughly in the same way, if only one private key is used, then you will not be able to enter the wallet or perform a transaction.
Multisig by DecimalChain
In addition to the usual non-castodial wallet, you can use the Decimal console to create your own multisig wallet.
You can add more than three participants when creating a wallet, and set each participant’s values and the required number for confirmation. “Advanced Mode” allows adding a comment for other participants and a coin with which the transaction fee will be charged.
Despite so many pluses, there are still a few disadvantages. The system is new and not improved enough, so it is possible to get scammed. A multisig wallet has a more complicated structure than a basic wallet with a single private key, although many options can now be found to simplify the interaction with such wallets. Such as the multisig from DecimalChain. There you can configure the number of keys, more than 2, to specify the value of the vote and the number of phrases needed for confirmation.
As everywhere else, there are disadvantages, but even such disadvantages can be turned into advantages if this system continues to develop, as well as the cryptocurrency industry itself.