Crypto Basics: Multisig Wallet

A multisig (multi-signature) wallet is a type of cryptocurrency wallet that requires multiple approvals or signatures to complete a transaction. In a standard wallet, having the private key is enough to authorize transactions. However, in a multisig wallet, multiple parties must approve a transaction before it is executed. The required number of approvals is predefined. For example, a "2-of-3" format means that while three people have access to the wallet, any two of them must approve a transaction for it to be processed.

Benefits of a Multisig Wallet

Multisig wallets offer several advantages. Since multiple approvals are required, they are more secure against hacking or phishing attacks. They also help build trust among wallet users and prevent fraud. While multisig wallets are less common for individual users, they are widely used in projects, organizations, and DAOs (Decentralized Autonomous Organizations).

There are various platforms available for setting up a multisig wallet, such as Gnosis Safe. You might want to check it out!