Multisignature Wallet
A multisignature (“multisig”) wallet is a cryptocurrency wallet that requires multiple approvals (via multiple private keys) to authorize transactions. The primary purpose of multisig wallets is to reduce the risk of unauthorized access to digital assets through the requirement for multiple approvals. A secondary purpose of multisig wallets is to reduce the risk of catastrophic loss of assets if a single key is lost.
Multisig wallets require a specified threshold of approval from a defined set of private keys, as the following examples describe:
- 1-of-2 signatures: Could be useful for family members or other high-trust partners who want to individually access shared crypto holdings.
- 2-of-3 signatures: Especially helpful for escrow situations, where an objective third party may need to additionally approve a transaction after confirming that some off-chain transfer or event has taken place.
- Countless varieties with higher numbers of participants, tailored for individual situations.
Because of its operational complexity, many analysts see multisignature wallets as a transient or “bridge” technology that serves a niche while more elegant forms of social custody are developed. For example, wallets that have social recovery protection like Vault12 Guard do not have the risk of a single point of failure if a key is lost, which reduces the need for complex mechanisms like multisig wallets.
Key Benefits
- Enhanced protection against unauthorized spending — Even if one key is stolen, the wallet cannot be accessed without additional approvals.
- Convenient for shared accounts — Often used in business accounts where the CEO, CFO, and a Board member must sign off on transactions.
Key Challenges
- Added complexity for all participants.
- Additional risks related to securely backing up, rotating, and managing private and public keys among a wider set of participants.
How It Works
- Wallet Setup — A user configures the wallet with a specific number of private keys and sets the required threshold of approvals (e.g., 2-of-3).
- Transaction Initiation — When initiating a transaction, an approval request is sent to the holders of the keys.
- Signing the Transaction — Each authorized party signs the transaction using their private key. Once the required number of approvals is met, the transaction is executed.
Related Terms
- Private Key
- Decentralization
- Social Recovery
Vault12
Vault12 is the pioneer in crypto inheritance and backup. The company was founded in 2015 to provide a way to enable everyday crypto customers to add a legacy contact to their cry[to wallets. The Vault12 Guard solution is blockchain-independent, runs on any mobile device with biometric security, and is available in Apple and Google app stores.
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You will lose your Bitcoin and other crypto when you die...
...unless you set up Crypto Inheritance Management today.
It's simple — if you don't worry about crypto inheritance, nobody else will — not your software or hardware wallet vendors, not your exchanges, and not your wealth managers. So it's up to you to think about how to protect the generational wealth you have created, and reduce the risks around passing that crypto wealth on to your family and heirs. What are the challenges with crypto inheritance?
- Crypto Wallets are difficult to use and do not offer crypto inheritance management. In fact, most of them tell you to write down your seed phrase on a piece of paper, which is practically useless.
- Some people back up their wallet seed phrases or private keys on paper, local devices like hardware wallets or USBs, or in the cloud. All of these options have severe drawbacks that range from hacking to accidental loss to disrupted cloud services.
- Software wallets operate onspecific blockchains, yet your crypto assets span multiple blockchains. For inheritance to work, you must be able to manage inheritance across every blockchain — now and forever.
Crypto Inheritance Management: Secure, Self-Custody Crypto Inheritance and Backup
Vault12 is the pioneer in Crypto Inheritance Management, offering a simple yet powerful way to designate a legacy contact and pass on your crypto assets—like Bitcoin (BTC), Ethereum (ETH) and Solana (SOL) —to future generations. Built for everyday users yet robust enough for the most seasoned crypto enthusiasts, Vault12 Guard ensures your wallet seed phrases and private keys are preserved in a fully self-sovereign manner, across all Blockchains.
At the heart of Vault12 Guard is quantum-resistant cryptography and a decentralized, peer-to-peer network of trusted Guardians. Your critical information is never stored in the cloud, on Vault12 servers, or even on local devices—dramatically reducing the risk of a single point of failure. By fusing a powerful software layer with the Secure Element of iOS devices (Secure Enclave) and Google devices (Strongbox), Vault12 Guard locks down your private keys against present and future threats.
Our innovative approach harnesses social recovery, enabling you to appoint one or more trusted individuals or mobile devices as Guardians. These Guardians collectively safeguard your protected seed phrases in a decentralized digital Vault—so there’s no need for constant lawyer updates or bulky paperwork. Should the unexpected happen, your chosen legacy contact can seamlessly inherit your crypto assets without compromising your privacy or security.
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Take the first step and back up your crypto wallets.
Designed to be used alongside traditional hardware and software crypto wallets, Vault12 Guard helps cryptocurrency owners back up their wallet seed phrases and private keys (assets) without storing anything in the cloud, or in any single location. This increases protection and decreases the risk of loss.
The first step in crypto Inheritance Management is making sure you have an up-to-date backup.
The Vault12 Guard app enables secure decentralized backups, and provides inheritance for all your seed phrases and private keys across any blockchain, including Bitcoin, Ethereum, and others, and for any crypto wallet.
Note: For anyone unfamiliar with cryptocurrencies, Vault12 refers to wallet seed phrases and private keys as assets, crypto assets, and digital assets. The Vault12 Guard app includes a software wallet that works alongside your Digital Vault. The primary purpose of this is to guard your Bitcoin (BTC) and Ethereum (ETH) wallet seed phrases, private keys, and other essential data, now and for future generations.
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