What is a multi-signature wallet?

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by olen , in category: Cryptocurrencies , 10 months ago

What is a multi-signature wallet?

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1 answer

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by keshawn , 10 months ago

@olen 

A multi-signature wallet, also known as a multisig wallet, is a type of cryptocurrency wallet that requires multiple signatures or approvals before a transaction can be executed. Traditional cryptocurrency wallets usually require only a single private key to authorize a transaction.


In contrast, a multi-signature wallet uses multiple private keys, typically held by different individuals or entities, to validate and authorize transactions. The number of required signatures can be customized, but it commonly involves two or three signatures from a group of predetermined participants.


The purpose of a multi-signature wallet is to enhance security and reduce the risk of unauthorized access or fraudulent transactions. It provides an additional layer of protection against theft, hacks, or single point of failure. Even if one private key is compromised, transactions cannot be authorized without the involvement and consensus of multiple key holders.


This type of wallet is commonly used by businesses, organizations, or individuals who wish to distribute control and responsibility over their cryptocurrency holdings a**** multiple parties, while ensuring that no single individual has complete control over the funds.