Best Multi-sig setups possible
Multi-sig is one of the best ways to enhance your assets’ security. However, do you know what’s the best multi-sig setup for you? Let’s find out -
Finding the best setup does not rely solely on security. Manageability plays a huge role in choosing the correct multi-sig setup. Finding the sweet spot between the manageability of keys and security in a multi-sig setup involves balancing the number of keys required to authorize transactions (M) and the total number of keys (N).
Have no clue about what we are talking about? Let’s debunk the jargon -
Explanation of M-of-N
N (Total Keys): This represents the total number of keys or signers that are part of the multi-sig setup. These keys are typically held by different people, devices, or locations to distribute control and increase security.
M (Required Keys): This represents the number of keys that must be used to approve or sign a transaction. This threshold is set to ensure that a certain number of independent approvals are required before any action can be taken, adding a layer of security.
Factors to Consider
Manageability of Keys:
Key Distribution: More keys (higher N) mean more complexity in distributing and managing keys securely.
Redundancy: Higher redundancy (more keys than required) allows for easier recovery if keys are lost or compromised.
Security:
Compromise Resistance: The number of keys an attacker must compromise to gain control.
Threshold Flexibility: The number of keys required (M) impacts the ease of transaction authorization and overall security.
Popular Multi-sig Setups
Here’s a detailed comparison of the most common M-of-N setups with a focus on both security and manageability:
Finding the Sweet Spot
As we have clearly seen, the higher the number of keys (N) and required signatures (M), the more secure but less manageable the setup becomes. Lower N and M setups are easier to manage but less secure. But the question is, which setup is the best for you?
3-of-5 Multi-Sig Setup: This setup strikes a good balance between manageability and security. Managing five keys is feasible, and requiring three signatures ensures high security.
2-of-3 Multi-Sig Setup: This is another good balance for those who prefer simplicity with adequate security. It’s easier to manage three keys, and two signatures provide solid security.
Conclusion
The 3-of-5 setup is generally considered the sweet spot for balancing security and manageability. It provides high security by requiring a majority of keys while offering redundancy to handle key loss. For a simpler but still secure option, the 2-of-3 setup is also highly effective.
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