Multi-Signature Wallet

A Multi-Signature Wallet (or Multi-Sig Wallet) is a type of cryptocurrency wallet that requires multiple private keys to authorize a transaction. It adds an extra layer of security by requiring more than one person to sign off on a transaction before it can be executed.

How Multi-Signature Wallet Works

In a multi-signature wallet, a transaction can only be completed if it is signed by a predefined number of participants. For example, a 2-of-3 multi-sig wallet means that two out of three authorized signers must approve a transaction. This is often used by organizations or groups to ensure that no single party has full control over the wallet.

Benefits of Multi-Signature Wallet

Multi-signature wallets provide enhanced security, especially for joint accounts, businesses, and large transactions. They reduce the risk of theft or fraud by ensuring that multiple approvals are needed before any action is taken.