Multisig

Multisig (multisignature) is a mechanism in which an operation requires multiple independent digital signatures. Instead of relying on one private key, the system uses multiple authorized keys and a rule specifying how many signatures are required.

For example, a 2-of-3 configuration has three authorized keys, but any two can approve an operation. This allows control to be distributed among multiple people, devices, or organizations.

Common multisig use cases

• joint management of corporate reserves;
• crypto project treasuries;
• protection of large crypto asset holdings;
• reducing dependence on one device or person;
• creating internal transaction approval procedures.

Multisig can reduce the impact of compromise of a single key, but it introduces additional operational complexity. Multiple keys must be securely stored, the signing process must be coordinated, and a recovery plan must exist. Depending on the blockchain, multisig can be implemented at the protocol level, through specialized scripts, or with smart contracts.