What is a Multi-Sig wallet?
About Multi-Sig Wallet.
Multi-Sig means multi-signature, it is a specific type of crypto signature that will allow more than two users to sign as a group. That means multi-signatures are generated by combining multiple single signatures.
You can imagine a safe with two locks and two keys, one held by A and one held by B. The only way to open this safe is for both A and B to provide the key to unlock it. If you only have one of the keys, you cannot open the safe.
In a word, Multi-Sig is to divide the asset control rights of the wallet address to 2 more people, which is suitable for enterprise management and can also help users to protect their wallet assets better.
Private Key is used to transfer assets and verify transactions. The private key of the decentralized wallet is held by the users, and users are responsible for protecting the private key and keeping it safe.
Public Key is used to encrypt session keys, verify crypto signatures, or encrypt data that can be decrypted by the corresponding private key.
Wallet Address is the hashed version of the public key. When a user wants to receive assets, he discloses his public address to the other.
The difference between Single-Sig and Multi-Sig wallets.
Single-Sig wallet is the most common form of wallet in the current blockchain wallet. Most of the crypto users are holding Single-Sig wallets and the wallets can only be controlled by private keys and secret recovery phrases. That means anyone who holds this private key or secret recovery phrase can directly control the wallet address, meanwhile, the one who holds the private key or secret recovery phrase can transfer the wallet assets without permission.
Multi-Sig wallet provides a solution for this situation. By setting 2 more people to jointly manage an address, only the managers sign and agree to use the assets in the address, which greatly reduces the risk of asset loss caused by private keys being leaked.
The most important feature of a Multi-Sig wallet is that wallet transactions require the approval of the private key holders. Ordinary, the “m-n mode” needs to be confirmed when a Multi-Sig wallet is created. Only the “m” holders of the “n” private keys jointly sign and approve the transfer to complete the transfer operation.
“2–3 mode” is the most common form of Multi-Sig wallets, every transaction needs to be approved by the 2 private key holders, which can balance the relationship between safety and convenience.
The advantages of Multi-Sig wallet.
1. More Secure
In the Single-Sig wallet, the private key that determines the ownership and management of cryptocurrencies is only in the hands of individuals. Once the private key is lost or the holder forgets the secret recovery phrase or private key, that means the holder lost the control right of the wallet assets. The existence of Multi-Sig wallets minimizes the risk of asset loss when a single private key is lost.
Multi-Sig wallets greatly help users reduce security incidents due to lost or stolen private keys. Since the Multi-Sig wallet is controlled by two or more wallet addresses, even if the private key of one of the wallets is leaked, the wallet assets of the Multi-Sig address cannot be transferred, which greatly reduces the risk of asset loss.
Take the “2–3 mode” as an example, among all 3 private keys, as long as 2 of the private keys have completed the signature approval operation, the relevant encrypted wallet address can be transferred. Even if one private key is lost, the transfer of assets can be completed through the remaining two private keys to avoid asset loss.
2. Multiple verifications to avoid the wrong transactions.
Multi-Sig wallets can be used to avoid the wrong transactions by multiple verifications. If you enter the wrong account when you transfer in a bank, the transaction will fail and the assets will return to the original account. But the transaction on the blockchain are irreversible, once the assets are transferred to the incorrect address, the asset will not be returned. Using a Multi-Sig wallet, when a private key owner initiates a wrong transaction, other private key holders can prevent the wrong transaction by rejecting the signature when they find the error. The more people involved in signature verification, the fewer wrong transaction will occur.
Multi-Sig requires users to finish multiple signatures to transfer the wallet address, which provides higher security. However, many users don’t have enough knowledge of multi-signature wallets, and TokenPocket will continue to share more basic knowledge to help users to learn more about it. Meanwhile, TokenPocket’s multi-signature wallet will be launched soon! We hope to bring a more secure decentralized wallet experience to all users! Security as it should be!
TokenPocket is the world’s leading multi-chain self-custodial wallet, which supports mainstream public chains including BTC, ETH, BSC, TRON, Polygon, Solana, HECO, Klaytn, Avalanche, OKC, HSC, Fantom, Polkadot, Kusama, etc. The trinity of TokenPocket mobile wallet, chrome extension wallet, and hardware wallet has been formally formed. The Secret Recovery Phrase and Private Key are stored in the user’s own device and the user can fully control his own crypto assets. TokenPocket has provided reliable services for over 20 million users around the world. The number of monthly active users exceeds 3.5 million and the users are located in more than 200 countries around the world.