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Multi-signature Wallets and Their Benefits

Multi-signature Wallets and Their Benefits

Technologies don’t stay still and innovations are appearing every day. One of those modern tools we want you to be acquainted with is multisig wallet. The word «multisig» means multi-signature, this’s a special kind of digital signature that lets couple or a larger number of users approve records performing as an organisation. It’s conceivable because technology combines numerous individual signatures in it.

Operating Process of Multi-signature Wallet

Let’s suppose that there’s a latch with 2 keys, one of them is yours and the second is your friend’s. The latch opens solely with two keys together, which indicates that you won’t be capable to unlock it without your friend, so does he.

The similar thing occurs with a multi-signature wallet. You'll have an opportunity to make modifications in the multisig address exclusively if the rest of the members have signatures. This implies that the ones who apply multisig technologies automatically add a sheltering layer to their capitals.

Nowadays, many various platforms have attached multi-signature features to their projects. Bitfoliex is one of them. This platform has a multi-signature wallet as well as a crypto exchange, so it’s easier to swap the stocks you are storing or get some more coins if you want to.

Another project, that uses multisig tools is BitGo. The advantage of this one is that it has three types of wallets: web, mobile and desktop.

And the one that is probably the most popular in the crypto environment is Coinbase. It uses 3-key architecture technology, which gives you total control of your funds.

High Level of Protection

These wallets stop users from facing some serious problems like capital losses when they're losing the individual keys. Even if you miss 1 of the keys, the multisig technology is still going to keep your stocks defended.

If you have 3 keys and accidentally miss one of them you’ll yet have access to the wallet because in this case, you are still the majority. And if someone has stolen your key, he won’t have the opportunity of making changes in your account with a single key.

Also, there’s an option of performing a multi-signature wallet, which claims 2 keys and it’s known as two-factor authentication. This suggests you save one of the individual keys on the laptop and the second on your smartphone. So, you’ll have entrance to the wallet if you give two of them.

It's important to keep in mind, is that if you apply two-factor authentication and miss one of the keys you won’t have an opportunity to sign in to your account. That’s why it’s profoundly recommended to use a 2-of-3 setup or a 2FA third-party service.

Applying Multisig Tools in Business

This technology has its benefits in the sphere of business. It may help entrepreneurs in the decision-making process. If a chief sets up a 5-of-7 account where each board user has a single key, the exclusive decisions that will be performed are going to be those that are accepted by the bulk.

Multi-signature options have already been attached to various apps and platforms and made various crypto coins like BTC extra beneficial and engaging. This is becoming more evident in the business field. They've also increased the level of stability and safety, which is very attractive for those who practise hodling.

28 Aug 2019
The views and opinions expressed in blogs are those of the authors and are not the official policy or position of ICObench. Any content provided by our bloggers or experts is of their opinion and they are fully responsible for it. ICObench is not legally responsible for the blog's content.

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10 Jan 2020 Andrey Sergeenkov 0 0 727
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