{"id":9352,"date":"2023-12-20T07:50:24","date_gmt":"2023-12-20T12:50:24","guid":{"rendered":"https:\/\/faisalkhan.com\/?page_id=9352"},"modified":"2023-12-20T07:50:26","modified_gmt":"2023-12-20T12:50:26","slug":"multi-sig-wallet","status":"publish","type":"page","link":"https:\/\/faisalkhan.com\/learn\/payments-wiki\/multi-sig-wallet\/","title":{"rendered":"Multi-Sig Wallet"},"content":{"rendered":"\n<p>A multi-signature (multi-sig) wallet in the world of banking and cryptocurrency is a type of digital wallet that requires multiple approvals, or &#8220;signatures,&#8221; before a transaction can be made. Here&#8217;s a simple breakdown of how it works:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Definition<\/h3>\n\n\n\n<ul>\n<li><strong>Multi-Sig Wallet<\/strong>: A digital wallet that requires more than one signature to authorize a transaction. This is different from a standard wallet, which requires just one signature (usually the wallet owner&#8217;s).<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">How It Works<\/h3>\n\n\n\n<ol>\n<li><strong>Setup<\/strong>: The wallet is created with specified rules for how many signatures are needed. For example, a 2-of-3 wallet means any two out of three designated people must approve a transaction.<\/li>\n\n\n\n<li><strong>Signatures<\/strong>: These are not physical signatures like on a paper check. Instead, they are digital approvals, each one typically tied to a unique private key held by each user.<\/li>\n<\/ol>\n\n\n\n<h3 class=\"wp-block-heading\">Examples of Transactions<\/h3>\n\n\n\n<ul>\n<li><strong>Deposit<\/strong>: Anyone can deposit into the wallet, just like a regular wallet. No multi-signature is required for deposits.<\/li>\n\n\n\n<li><strong>Withdrawal\/Transfer<\/strong>:<\/li>\n\n\n\n<li><strong>Initiation<\/strong>: One user initiates a transaction, say, to send cryptocurrency to another address.<\/li>\n\n\n\n<li><strong>Approval<\/strong>: Other designated users must then provide their digital signature (approval).<\/li>\n\n\n\n<li><strong>Execution<\/strong>: Once the required number of signatures is reached, the transaction is processed.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Benefits<\/h3>\n\n\n\n<ul>\n<li><strong>Security<\/strong>: It&#8217;s harder for unauthorized users to access funds, as they would need multiple keys.<\/li>\n\n\n\n<li><strong>Checks and Balances<\/strong>: Prevents a single user from unilaterally making transactions, which can be useful in organizations or group settings.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Example Scenario<\/h3>\n\n\n\n<p>Imagine a charity organization with a 3-of-5 wallet:<\/p>\n\n\n\n<ul>\n<li>The wallet needs three approvals out of five possible approvers (like board members) for any spending.<\/li>\n\n\n\n<li>When a withdrawal is needed, one member initiates a transaction to transfer funds to a vendor.<\/li>\n\n\n\n<li>Two other members review and approve the transaction with their digital signatures.<\/li>\n\n\n\n<li>Once three signatures are obtained, the transaction is automatically executed.<\/li>\n<\/ul>\n\n\n\n<p>This is a simplified explanation, but it covers the basic concept and mechanics of a multi-sig wallet. The digital signatures are cryptographic proofs that the correct authorized persons have approved the transaction.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A multi-signature (multi-sig) wallet in the world of banking and cryptocurrency is a type of digital wallet that requires multiple approvals, or &#8220;signatures,&#8221; before a transaction can be made. Here&#8217;s a simple breakdown of how it works: Definition How It Works Examples of Transactions Benefits Example Scenario Imagine a charity organization with a 3-of-5 wallet: [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":3611,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_uag_custom_page_level_css":"","_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"blocksy_meta":[],"featured_image_urls":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":"","gb-block-post-grid-landscape":"","gb-block-post-grid-square":"","yarpp-thumbnail":""},"post_excerpt_stackable":"<p>A multi-signature (multi-sig) wallet in the world of banking and cryptocurrency is a type of digital wallet that requires multiple approvals, or &#8220;signatures,&#8221; before a transaction can be made. Here&#8217;s a simple breakdown of how it works: Definition Multi-Sig Wallet: A digital wallet that requires more than one signature to authorize a transaction. This is different from a standard wallet, which requires just one signature (usually the wallet owner&#8217;s). How It Works Setup: The wallet is created with specified rules for how many signatures are needed. For example, a 2-of-3 wallet means any two out of three designated people must&hellip;<\/p>\n","category_list":"","author_info":{"name":"Faisal Khan","url":"https:\/\/faisalkhan.com\/author\/nomismad\/"},"comments_num":"0 comments","featured_image_urls_v2":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":"","gb-block-post-grid-landscape":"","gb-block-post-grid-square":"","yarpp-thumbnail":""},"post_excerpt_stackable_v2":"<p>A multi-signature (multi-sig) wallet in the world of banking and cryptocurrency is a type of digital wallet that requires multiple approvals, or &#8220;signatures,&#8221; before a transaction can be made. Here&#8217;s a simple breakdown of how it works: Definition Multi-Sig Wallet: A digital wallet that requires more than one signature to authorize a transaction. This is different from a standard wallet, which requires just one signature (usually the wallet owner&#8217;s). How It Works Setup: The wallet is created with specified rules for how many signatures are needed. For example, a 2-of-3 wallet means any two out of three designated people must&hellip;<\/p>\n","category_list_v2":"","author_info_v2":{"name":"Faisal Khan","url":"https:\/\/faisalkhan.com\/author\/nomismad\/"},"comments_num_v2":"0 comments","yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.6 (Yoast SEO v22.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Multi-Sig Wallet - Faisal Khan<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/faisalkhan.com\/learn\/payments-wiki\/multi-sig-wallet\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Multi-Sig Wallet\" \/>\n<meta property=\"og:description\" content=\"A multi-signature (multi-sig) wallet in the world of banking and cryptocurrency is a type of digital wallet that requires multiple approvals, or &#8220;signatures,&#8221; before a transaction can be made. 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