3 Minute Crypto
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3 Minute Crypto

This is an email from A 3 Minute Crypto Weekly Newsletter, a newsletter by 3 Minute Crypto.

What is a MultiSig Wallet?

Most people familiar with crypto and who have bought crypto will be already familiar with crypto wallets.

If you are planning to seriously invest in crypto you will need some kind of crypto wallet for sure. There are different types of wallets like software wallets or hardware wallets or even web-based wallet services. But if you just like to buy a few cryptos and hold them in a wallet there are easy ways to do that. You can use the wallet features of crypto exchanges and just need to signup for their service. These wallets are called custodial wallets where your private keys will be held on the service provider's servers. The only benefit here is the ease of use but the cost is you have to trust your service provider with your crypto assets. Coinbase, Robinhood, etc all provide you with such wallet features.

The single-key wallets are most popular with retail users and private keys can be transformed into a 12-word “seed phrase” for better usability. But there is always the risk of a user losing the seed phrase and the wallet becomes unusable and the crypto assets are lost forever.

So there is another kind of wallet called MultiSig wallets.

A MultiSig crypto wallet unlike regular crypto wallets operates with multi-signature addresses and requires more than one private key to sign and authorize a crypto transaction. A MultiSig wallet is a security and usability-enhanced version of a regular crypto wallet.

Gnosis Safe | Electrum Bitcoin Wallet

A popular example of a MultiSig wallet on the Ethereum network is Gnosis Safe

One of the oldest and most trusted Bitcoin wallets Electrum offers the MultiSig feature.

Currently, MultiSig transactions in the Bitcoin network are expensive and have privacy issues. But the recent Taproot upgrade in Bitcoin will help wallet providers to resolve these issues.

More about Taproot upgrade in Bitcoin sometime later,

Have a great weekend!

-Zijo

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zijo

Thinker, Dreamer, Writer & less of a Reader | Crypto enthusiast. Become a Medium member today to read all my publications. https://zjoy.medium.com/membership