Digital wallets are financial accounts that store funds and make transactions. You can also track transaction histories. Instead of using rupees, dollars we can also use cryptocurrencies such as Bitcoin, Ether, and many more. Generally, a wallet needs one signature to sign a transaction. We can also have multisignature wallets whose access is shared with more than one member i.e we can have copayers. To simplify it, to complete a transaction successfully we need more than one signature. It has the functionality of setting a minimum signature count i.e the minimum number of signatures required to complete the transaction.
For example, A multisignature wallet has 10000 tokens and is shared between Ajay, Neha, and Amit and the minimum signature count is 2. So at least two of them need to sign a transaction for it to become successful.
This concept is not new. It has been used to secure assets for quite some time but digital implementation has been done recently. For example, limited access such as partial keys of a locker was given earlier to protect the assets.
- Armory: It is an open-source wallet without any need for third-party servers. A maximum of seven authorized signers can be a part of a single wallet. It is available for Windows, Linux, and Mac Desktops.
- Electrum: It is an open-source and one of the most popular multisignature wallets. It can easily be integrated with third-party hardware wallets such as Ledger and Trezor. A maximum of fifteen authorized signers can be a part of a single wallet. It is available for Windows, Linux, and Mac Desktops as well as on mobile.
- BitPay: It is an open-source wallet without any need for third-party servers. A maximum of three authorized signers can be a part of a single wallet. It is available for Windows, Linux, and Mac Desktops as well as on mobile. We also have a Chrome extension for this.
- FreeWallet: It is not an open-source wallet. A maximum of three authorized signers can be a part of a single wallet. It is available for iOS, Android, and through our browsers.
There are several other wallets such as Carbon, BitGo, Casa, and many more and you can choose one depending on your need.
- It can be used in escrow transactions. An escrow transaction is when assets are held by a third party on behalf of other participating parties till all the obligations are met.
- It can be used in companies having large funds. It can be used when the board of directors wants to control access to funds.
- It creates an additional layer of security. Even if one of the owners loses it’s key it is still safe.
- It also helps in preventing the misuse of funds.
- It can also be used by a single person to add security. He/She can keep both the keys separately. So even if one of them is lost it can still be accessed.
- Setting up a multisignature wallet requires some technical information, particularly on the off chance that you would prefer not to depend on third-party providers.
- Since blockchain and multisignature wallets are both relatively new, it might be hard to look for a legal alternative if something goes wrong
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