A multi-signature wallet is one of the advanced security tools available to cryptocurrency users. Yet, many investors do not use them because they do not understand how multi-signature, or multisig, wallets work. There is also a false narrative that multi-signature wallets eliminate all security risks associated with holding cryptocurrency. Although multisig wallets provide remarkable security, some high-profile breaches, such as Ronin Network’s $625 million hack, have come from compromised multisig wallets, where the private keys were stored improperly. Read on to learn what a multisig wallet is and why they are considered a must-have for storing digital assets in a corporate setup, as well as the available types of multisig wallets and the advantages and disadvantages of adopting these solutions. A multi-signature wallet is a cryptocurrency wallet that requires multiple signatures — instead of just one — to execute each transaction. The signatures are associated with different cryptographic private keys, while a defined threshold of keys must sign a transaction to validate it. The workflow of a multisig wallet is the same irrespective of the number of signers. Any parties to a multisig wallet can initiate a transaction signed with their private key. However, the transaction is displayed as pending until other parties sign it.
Full explainer : What Are Multisig Wallets?
