Multi-Signature

A digital security feature that requires multiple private keys to authorize a cryptocurrency transaction. This method enhances security by distributing control of a wallet or a transaction among multiple parties. For instance, a multi-signature wallet might require signatures from three out of five authorized keys to process a transaction.

Multi-signature arrangements are commonly used in scenarios where increased security and trust are essential, such as in corporate treasury management, joint accounts, or escrow services. By requiring multiple approvals, multi-sig helps prevent unauthorized transactions and reduces the risk of fraud, theft, or loss of funds due to a single compromised key. This feature is supported by many cryptocurrencies, including Bitcoin and Ethereum, and is implemented using various protocols and standards to ensure compatibility and security.