What is a Multisig Wallet?

Multisig. Simply the abbreviation of multi-signature. It is a type of digital signature where multiple users can sign as a group. A kind of collective signature. This technology existed before Bitcoin, although many people do not know it.

In the crypto world, Bitcoin addresses appeared back in 2012. Multisig wallets came shortly after. It's not complicated. Most people use these addresses for security.

How does it work?

Think of it this way: a safe with two locks. Alice has one key. Bob has the other. No one opens anything without the other. It's that simple.

Funds in multisig addresses require multiple signatures to move. Nothing moves without consensus. It's like adding extra layers of protection to your money.

Single-Key Wallets vs. Multisig

Bitcoins typically reside in standard addresses. One key, one owner. Whoever holds that private key controls everything. Without extra permission.

Single-key addresses are fast. Convenient. But somewhat dangerous. They are a single point of failure. Hackers know this well and keep inventing new tricks to steal.

Applications of Multisig wallets

By 2025, multisig has evolved quite a bit. MuSig2, FROST. More advanced systems. It seems that companies and DAOs are the ones who benefit the most from them for their governance.

Increased security

With multisig, losing a key is not a catastrophe. The funds remain safe.

Alice creates a 2-of-3 address. She stores each key in different places: mobile, laptop, tablet. Her mobile gets stolen. Nothing happens. The thief only has one piece of the puzzle.

Two-factor authentication

Two keys, two devices. Alice has one on her laptop and another on her mobile. She needs both to move her money. Simple but effective.

Escrow deposit transactions

Alice and Bob do not know each other. They do not fully trust each other. They create a 2-of-3 wallet with Charlie as the arbiter. No one can deceive anyone. The system works on its own.

Decision making

A board of directors. Six members. A 4-out-of-6 wallet. No individual director can take the money. The majority must agree.

Current options in the market

Safe/Gnosis, Casa, Specter, Sparrow... All shine in 2025. Low fees, good security. Ledger remains king for Bitcoin. It's not entirely clear which is better, it depends on what you are looking for.

Disadvantages

Multisig wallets are not perfect. You need some technical skill to set them up correctly. It's not for beginners.

And there is a legal problem. If something goes wrong... who do you claim against? The laws have not caught up with the technology. No one is a legal custodian in these shared cases.

Final considerations

Multisig has problems. Sure. But its applications are fascinating. They make Bitcoin more useful for businesses. Safer for everyone. Greater protection. Less trust needed.

And it seems that we will see a lot more multisig in the future. It is somewhat surprising that it is not already the standard.