Multi-signature wallet

A multi-signature, or multisig, wallet requires more than one private key to approve a transaction. Setups are described as M-of-N, meaning any M signatures out of N total keys are needed to authorise a transfer, for example 2-of-3. The keys can be held on separate devices or by different people, so control is distributed rather than concentrated in a single secret. On many networks this is implemented directly by a smart contract that enforces the signing threshold before releasing funds.

Why it matters

Multisig removes the single point of failure inherent in a one-key wallet. If one key is stolen, lost, or phished, funds remain safe because the thief still lacks the required threshold. Organisations use multisig to enforce internal controls, and individuals use it to spread keys across locations or devices. It also supports recovery: with a 2-of-3 design, losing one key need not mean losing access. Because approval is split, an attacker who phishes or steals a single device is stopped short of the threshold, which is why treasuries, custodians, and security-conscious individuals favour multisig over storing everything behind one key.

Common misunderstanding

People sometimes think multisig eliminates all risk. It reduces single-key compromise but introduces coordination complexity, and a poorly chosen threshold can backfire; a 3-of-3 setup means losing any one key locks funds permanently. Multisig also does not protect against approving a malicious transaction that all signers unwittingly sign, so verifying what is being authorised still matters even with several keys.

Related terms

See non-custodial wallet, blind signing and dApp.