A significant concern for cryptocurrency holders is asset security. Security concerns often involve protocols and the safety of cryptocurrency wallets, which present substantial threats to funds that hackers may have stolen or tampered with. One of the solutions to prevent any loss is a multi-signature wallet. This article details everything you must know about multisig wallets, including the five best multisig wallets you can choose from.
What Is a Multi-Signature Wallet?
A multi-signature wallet is a cryptocurrency wallet that requires either two or more two private keys to sign and send a transaction. This digital signature allows two or more users to sign the transaction documents as a group. Signatories and co-owners to a shared multisig wallet are called “copayers.”
The number of signatures required to sign a transaction depends on the kind of wallet. It may be lower or equal to the number of copayers of the wallet. Multisig wallet technology existed in the world of cryptocurrencies, but the principle itself was around long before Bitcoin was even created.
How Does A Multi-Signature Wallet Work?
Multisig wallets work in similar ways to bank vaults. The technical component behind a bank vault makes it so that more than one key is required to open it. As a result, multisig wallets are often called vaults. You can choose how many keys are allowed to open the “vault” (as well as the minimum number of keys needed to unlock it). For example, you may choose a 3-of-4 multisig where three out of four assigned private keys are required.
Multisignature wallets offer additional features which non-crypto wallets offer, such as providing each copayer access and oversight over the funds and transactions of their wallets. A unique recovery phrase is given to each copayer sharing the wallet. Copayers must keep their recovery phrase secure or risk the chance that there need to be more copayers to sign transactions.
Top 5 multisig wallets
The following five wallets are the only ones we could find today that offer multi-signature addresses. They all have different features because they seem to solve slightly different issues. This means that it’s worth taking your time when picking one.
Yodaplus multisig wallet is a convenient way to manage all your crypto funds in one place. Yplusvault is one of the most secure wallets that can be trusted for all the new-age digital transactions. The system is built as a decentralized application that doesn’t require the need of any intermediary. Yplusvault is best suited for individuals or organizations that would need to do safer transactions at their ends. It has been built upon the Xinfin blockchain platform which is operational for XDCNetwork across the globe.
Armory is an open-source desktop bitcoin wallet. Armory is the most secure and allows users to generate and store Bitcoin private keys. It supports cold storage in which all confidential critical data is available only on the offline computer. This reduces the attacks. It also helps multi-signature. It allows users to create Multi-signature addresses using Lockboxes in an entirely distributed way.
BitGo wallet is available as a desktop, Web, and Mobile wallet. It is the most powerful bitcoin wallet and also supports multi-signature technology. It protects your wallet from any single point of failure with BitGo’s multi-signature security and 3-key management.
Key-1: It is also known as the Client key. The client or user stores it. It is used to initiate and sign a transaction from the client side.
Key-2: It is also known as the BitGo key. BitGo holds it. And, BitGo checks if the transaction satisfies all the policies or not. And sign the transactions initiated by the client.
Key-3: It is also known as the Backup key. It is stored by the client offline. It is used for disaster recovery or when a user loses his client key.
Coinbase is available as a web wallet. It is a hosted bitcoin wallet. Here, term hosted — Users don’t need to control private keys; Coinbase will manage all. It also provides non-hosted multi-signature wallets where users can hold their private keys.
CoPay is available as a mobile and desktop wallet. It is an open-source HD bitcoin wallet: HD — Hierarchical Deterministic. HD allows users to back up their wallet via seed phrase, which protects your funds from losing access. It also supports multi-signature. But the user is responsible for storing private keys.
Yodaplus is a highly specialized technology solutions company that will support you to create multisig wallets when it touches the boundaries founders established the company to meet the demand for secure and scalable solutions at the intersection of technology, finance, and blockchain. With a deep and vast knowledge of the global capital markets, we bring unique insights to our clients and help find solutions that simplify complex challenges.