Multi-signature

Example 2: An individual who's worried about losing their private key could have a multi-sig wallet with 3 private keys that only requires 2 keys to authorize a transaction . That way, he/she could recover the funds in the wallet even if they lose 1 of the private keys. This is called a 2-of-3 wallet.

Public-key cryptography is used to transfer data securely over open networks by encrypting the data sent to an address (public key) such that it can only be decrypted using the private key associated with the recipient's public key. There are a few potential problems with this system:

• Lack of security - A single-key wallet is vulnerable to malware and other attacks, especially if the private key is stored online (i.e. hot storage).
• Lack of access control for businesses - A business that transacts in Bitcoin, for example, will be vulnerable to insider theft if multiple people are entrusted with the same private key.
• Lack of recovery options - If the owner of a wallet permanently loses their private key, they will never be able to recover the funds in their wallet.

Multi-signatureMulti-Signature referswallets torequire athat processseveral ofprivate requiringkeys more(aka thandigital onesignatures) keyare used together in order to authorize a Bitcoin transaction. ThisIt is mostly applied in biggerup transactionsto wherethe morewallet thanowner oneto signaturedecide ishow gatheredmany beforeprivate fundskeys are releasedcreated and transferred,how makingmany theare required to authorize a transaction more secure.

Example 1: If two people who co-own a business that uses Bitcoin want to minimize the need to trust each other, they could create a multi-sig wallet which requires both of their private keys to authorize a transaction moving BTC out of the wallet. This is called a 2-of-2 wallet

Example 2: An individual who's worried about losing their private key could have a multi-sig wallet with 3 private keys that only requires 2 keys to authorize a transaction . That way, he/she could recover the funds in the wallet even if they lose 1 of the private keys. This is called a 2-of-3 wallet.

Example 3: An individual makes their software wallet more secure with two-factor authentication, which requires one private key stored on their computer and one generated by a mobile app on their phone such as Google Authenticator. (2-of-2)

Multi-signature refers to a process of requiring more than one key in order to authorize a BitcoinBitcoin transaction. This is mostly applied in bigger transactions where more than one signature is gathered before funds are released and transferred, making the transaction more secure.

-

Multi-signature refers to a process of requiring more than one key in order to authorize a Bitcoin transaction. This is mostly applied in bigger transactions where more than one signature is gathered before funds are released and transferred, making the transaction more secure.

-