• Multisig security, or “multisig” offers better security guarantees than singlesig solutions.
• A multisig wallet talks to multiple signing devices and coordinates between them for signing transactions.
• Multisig wallets reduce single points of failure and increase redundancy in your setup while minimizing trust in any one entity.
What is Multisig?
Multisig, short for multi-signature security, is a type of digital wallet that requires more than one key to sign a transaction. This means that the funds stored in the wallet are shared across multiple users (or “signers”), making it more secure than single-signature (singlesig) solutions. The wallet is referred to as a “vault” in apps like Bitcoin Keeper and Blue Wallet, while some also refer to it as the “coordinator” or “coordinating software.” It coordinates between multiple signing devices and uses PSBT format for signing transactions.
Considerations For Bitcoin Custody
When evaluating different forms of custody for bitcoin, there are several considerations: minimizing trust, operational effort, and setup costs. With multisig wallets, trust can be minimized as multiple entities are involved in managing funds. However, setting up and using multisig can be operationally more time consuming and may include extra costs associated with getting additional hardware or software components like signing devices.
Common Examples Of Attacks On Multisigs
Despite its advantages over singlesignature solutions, there are potential weaknesses associated with multisigs that can be exploited by malicious actors if not properly secured. Some common examples of attacks on multsigs include malicious code injection attacks where an attacker injects their own code into the coordinating software; physical attacks where an attacker gains access to the signing device(s); or phishing attacks where an attacker attempts to gain access to user credentials by posing as a legitimate source.
In conclusion, I believe that anyone holding a non-trivial amount of bitcoin for long-term HODLing should strongly consider implementing multi-signature security measures due to its enhanced level of security compared to singlesignature solutions. While there may be additional operational costs associated with setting up these measures correctly, they will pay off in terms of increased security against potential attackers.
Multisignature security (“multisig”) offers enhanced protection over singlesignature (“singlesig”) solutions when securing large amounts of bitcoin for long term storage (HODLing). It involves multiple signers which reduces points of failure while minimizing trust any one entity holds over funds stored in the wallet. Common examples of attack vectors on multsigs include malicious code injection attacks; physical attacks; and phishing attacks which attempt to gain access user credentials by posing as a legitimate source. Therefore anyone looking for secure storage options should strongly consider implementing multsigs despite its operational complexity associated with setting it up correctly