A multi-signature (multisig) is a specific type of digital signature that can be created by combining multiple signatures. Multisig technology allows two or more users to collectively sign digital documents or cryptocurrency transactions.

To understand this better, imagine a safe deposit box in a bank that has two locks and two keys. One key is held by Tom, and the other by John. To open the box, they both have to come to the bank, show their keys and unlock it together. This is exactly how multisig transactions work, except that you don't have to go anywhere, instead providing your digital key so that the transaction can take place.

Although multisig existed long before cryptocurrencies came along, it is most commonly associated with bitcoin. Specifically, multisig was first applied to the Bitcoin blockchain in 2012, leading to the widespread availability of multisig wallets in the following years.

Multi-signature use

Multisig is used to provide better security for crypto wallets. Multisig wallets not only bring enhanced security to teams and organizations that need to manage shared assets and carry out transactions with multiple parties, but also to individual cryptocurrency users. A single user can also hold multiple private keys for a single wallet, increasing their security.

Multisig wallets are highly secure cryptocurrency repositories for groups or organizations spread across the globe who want to manage funds with people they don't know or trust.

Multisig and classic crypto wallets

Classic crypto wallets have one private key that provides access to your assets. Only this key is required to sign the outgoing transaction (no additional confirmation is needed).

In contrast, a multisig wallet uses digital signatures that require multiple private keys (at least two) to sign an outgoing transaction. In some cases, the signature may generate several different keys.

A multisig wallet setup may look like this:

2-of-3: Only two signatures are required to confirm a transaction with three signatures.

2-of-2: Both signatures are required to confirm a transaction with two signatures.

3-of-3: All three signatures are required to confirm a transaction with three signatures.

3-of-4: Three signatures are required to confirm a transaction with four signatures.

Regardless of the specific combination, all multisig wallets aim to increase security in the crypto world.


  • Security
  • Multiple private keys


  • Higher transaction fees
  • Longer transaction confirmation
  • Challenging to use for newcomers


The features and basic concepts underlying multisig wallets suggest that they are a good tool for the future of crypto. With the need for multiple private keys to sign transactions, multisig wallets provide a guarantee of better security. However, the challenges of multisig wallets, such as the need for technical knowledge in order to use them, can pose significant difficulties for newcomers.

Analyst Opinion

Multisig transactions are a good step towards greater security in the crypto world. They give protocols the opportunity to manage their funds without fear that an individual can misappropriate them.

Individuals can also take advantage of this additional protection for their wallet, thereby preventing their assets from being stolen.

Ondřej Tittl

Ondřej Tittl


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