What is Multisig (Multi-Signature)?
Multisig is a Bitcoin security feature that requires multiple signatures to authorize a transaction. Instead of one key controlling your Bitcoin, you split control across multiple keys.
đŠ Real-World Analogy: Bank Vault
Think of a bank vault that requires two keys to open:
- The bank manager has one key
- The security officer has another key
- Both must be present to open the vault
This is exactly how 2-of-2 multisig works!
â Single-Signature (Standard)
1 key controls everything
Risks:
- â Lose key = Lose Bitcoin
- â Key stolen = Bitcoin stolen
- â No backup protection
- â Single point of failure
â Multi-Signature (Advanced)
Multiple keys required (e.g., 2-of-3)
Benefits:
- â Lose 1 key = Still have access
- â 1 key stolen = Bitcoin still safe
- â Built-in redundancy
- â No single point of failure
đ The m-of-n Notation
Multisig is described as m-of-n:
- n = Total number of keys in the setup
- m = Minimum signatures required to spend
đź Interactive: See Multisig in Action
Click the keys above to sign. Watch how different configurations work!
đŻ Assess Your Threat Model
Different multisig configurations protect against different threats. Let's identify what you need to protect against.
đ„ Loss
Key physically lost, destroyed, or inaccessible
- House fire destroys hardware wallet
- Forget password to encrypted backup
- Natural disaster
- Die without sharing access
đŠč Theft
Attacker gains access to one or more keys
- Burglary at home
- Malware on computer
- Social engineering attack
- $5 wrench attack
đ« Coercion
Forced to hand over keys under duress
- Physical threats
- Kidnapping
- Government seizure
- Hostage situations
đ€ Collusion
Multiple keyholders conspire together
- Family members team up
- Custodians coordinate
- Business partners collude
- Service providers cooperate
Your Threat Assessment
Select all threats you want to protect against:
Amount to Secure
đïž Choose Your Multisig Configuration
Select the m-of-n scheme that matches your security needs.
2-of-2
Medium SecurityBoth signatures required
â Good For:
- Joint accounts (couples, business partners)
- Requiring two-party approval
- Preventing unilateral access
â ïž Risks:
- â No redundancy - lose 1 key = lose Bitcoin
- â Both parties must be available
2-of-3
High Security MOST POPULARAny 2 out of 3
â Good For:
- Personal Bitcoin savings
- Balance of security & redundancy
- Most individuals
- Standard recommendation
Protection:
- â Lose 1 key = Still have access
- â 1 key stolen = Bitcoin still safe
3-of-5
Very High SecurityAny 3 out of 5
â Good For:
- High-value holdings (>$100k)
- Organizations/businesses
- Maximum redundancy
- Distributed teams
Protection:
- â Lose 2 keys = Still have access
- â 2 keys stolen = Bitcoin still safe
Custom
Advanced2-of-4
â ïž Advanced Users Only
Custom configurations allow fine-tuning for specific needs:
- 4-of-7 for organizations
- 5-of-9 for maximum security
- 2-of-4 for extended family
Note: Higher n = more complexity
đșïž Plan Your Key Distribution
Where will you store each key? Physical and geographic distribution is critical for security.
Key Distribution Principles
đ Geographic Separation
Store keys in different physical locations to protect against:
- Fire, flood, natural disasters
- Burglary at single location
- Coercion (can't access all keys)
đ Device Diversity
Use different device types to prevent common exploits:
- Mix hardware wallets (Ledger, Trezor, ColdCard)
- Different manufacturers = different vulnerabilities
- Software + hardware mix (advanced users)
đ„ Trusted Parties
Consider involving trusted individuals:
- Family members (different households)
- Attorney or executor
- Professional custodian
đ Documentation
Each keyholder needs clear instructions:
- What the key is for
- How to access in emergency
- Who else to contact
Interactive Distribution Planner
Drag and drop keys to plan your distribution strategy.
Your Keys (3 total)
đ Home
Drop key here
đą Office/Work
Drop key here
đšâđ©âđ§ Family Member
Drop key here
đŠ Bank Safe Deposit
Drop key here
âïž Attorney/Executor
Drop key here
đ Custom Location
Drop key here
Example Distribution Strategies
Individual (2-of-3)
- Key 1: Home safe
- Key 2: Bank safe deposit box
- Key 3: Trusted family member (different city)
Couple (2-of-3)
- Key 1: Primary residence
- Key 2: Vacation home / Office
- Key 3: Joint attorney or executor
Business (3-of-5)
- Key 1-2: Two executives
- Key 3: Company safe
- Key 4: Corporate attorney
- Key 5: Board member
âïž Practice: Collecting Signatures
Experience how multisig transaction signing works. You'll create a transaction and collect the required signatures.
Scenario: Spend 0.5 BTC from Multisig Wallet
Your Configuration: 2-of-3
Wallet Balance: 1.5 BTC
Sending: 0.5 BTC to bc1q...
Signature Collection Process
Create Unsigned Transaction
PendingOne keyholder initiates the transaction with destination address and amount.
Collect First Signature
LockedCollect Second Signature
LockedBroadcast Transaction
LockedOnce you have enough signatures, the transaction can be broadcast to the network.
Signature Collection Progress
0 of 2 signatures collected
đĄ Key Insights
Coordination Required
Multisig requires coordinating with other keyholders. In practice, this means:
- Physically accessing multiple devices
- Traveling to different locations
- Coordinating with family/business partners
Security vs Convenience
Higher security = more coordination overhead. Choose based on:
- How often you'll spend
- Value being secured
- Available help/resources
Partially Signed Transactions (PSBT)
In real multisig, you use PSBT format:
- Create unsigned transaction
- Each keyholder signs and passes along
- Final signature completes and broadcasts
đ Multisig Mastery: Summary & Best Practices
Your Multisig Setup
đ Best Practices
â Do This
- Test first: Practice with small amounts on testnet
- Document everything: Write down your setup for heirs
- Geographic distribution: Keys in different locations
- Device diversity: Different hardware wallet brands
- Regular practice: Test recovery annually
- Backup metadata: Save wallet descriptor/config
- Communicate: Keyholders know their role
â Don't Do This
- â Store all keys in one location
- â Use same device type for all keys
- â Forget to backup wallet descriptor
- â Skip testing the recovery process
- â Leave keyholders uninformed
- â Use 2-of-2 without understanding risks
- â Over-complicate with too many keys
đ ïž Recommended Multisig Wallets
Sparrow Wallet
Desktop
Best overall multisig experience. Excellent hardware wallet integration, PSBT support, and clear UI.
sparrowwallet.com âElectrum
Desktop
Original multisig wallet. More technical but very powerful. Great for advanced users.
electrum.org âBitcoin Core
Full Node
Maximum sovereignty. Requires technical knowledge but offers complete control.
bitcoin.org âNunchuk
Mobile + Desktop
User-friendly multisig for individuals and businesses. Collaborative features built-in.
nunchuk.io âCasa
Managed Service
Assisted multisig with recovery key. Good for those wanting help but maintaining control.
casa.io âUnchained Capital
Collaborative
2-of-3 with financial services integration. Professional custody with sovereignty.
unchained.com â