Multi-Signature Wallets 

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What does "Multi-signature" wallet mean?

A multi-signature (multisig) wallet requires multiple approvals before any Bitcoin can be sent from that wallet. Think of it as a safe or bank vault requiring 2 out 3 keys to open.

 

Multisig wallets allow for you to lose ONE of your private keys and still be able to access your Bitcoin. Multisig also protects against hackers, who would need multiple keys to access your wallet instead of just one.

 

How Multi-Sig Works:

1. Choose Your Setup

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2. Distribute your keys:

• For example, 1 private key at one location, 1 private key at a different location, the final private key stored in a deposit box or with a multisig company.

 

3. Approve your transactions:

To send Bitcoin out of your multisig wallet you…

• Request the transaction in your wallet 

• 2+ hardware devices/people must sign off on it

• The Bitcoin will be able to be sent.

 

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Why use a multi sig wallet?

Having a multisig wallet provides an extra layer of security while also giving you more peace of mind if you were to lose one of your private keys.

 

Families often utilize multisig for their inheritance. A wallet that is multisig is typically not used for making lots of transactions. These wallets are best meant to store and hold your Bitcoin

 

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Real World Examples:

• Family savings: Parents + adult children can have access

• Businesses: CEO + CFO + lawyer must all approve big transactions happening to their companies Bitcoin fund rather than just one person.

• Inheritance: The owner of the Bitcoin wallet can organize with multisig companies to give their keys to their heirs upon their death. This ensures a clean transition of the wallets private keys and funds without the need for court delays or a lawyer.

 

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We recommend using Unchained Capital for multisig:

• Unchained is compatible with your Trezor or Ledger.

• There is no monthly fee, just the transaction fees on the Bitcoin network. 

• You control and hold 2 of your private keys (seed phrases), and Unchained holds 1 key. 

• This allows you to access your funds if you lose one of your private keys with unchained’s help.

• They also help you set up an inheritance plan 

• Their software is all open source which gives peace of mind to users.

Unchained isn't sponsoring this section nor do they know we wrote it. We simply feel they are the best for Bitcoin owners who want full control, business owners with large Bitcoin funds, and for long term holders who are focused on their families, extra security and their inheritance.  

 

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Common questions:

Can I recover my funds if I lose a key?

• Yes. You only need 2 out of 3 keys to access your funds. Just make sure you replace the lost key right away.

Does it cost more to run a multisig wallet?

• Yes, slightly. Transaction costs are higher due to more data consumption. If using multisig with a cold wallet, you will also need to buy a second cold wallet.

Are transactions slower with multisig?

• Yes. Waiting for the co-signers of the wallet can take extra minutes-hours. However, most people don’t mind the small extra wait knowing their Bitcoin is more secure.