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Multisig: needing two keys out of three
Split control of your bitcoin across several keys so that losing one, or having one stolen, isn't a disaster.
- A multisig wallet needs several keys to sign, such as any 2 of 3.
- Keep the keys on different devices in different places.
- You also need a copy of the wallet's setup file to recover it.
A normal wallet has one key: whoever holds it can spend. A multisig wallet has several keys and needs a set number of them to sign, most often 2 of 3.
Why people use it
- Lose one key and the other two still move your coins.
- A thief who finds one device or one backup can't spend anything.
- Using devices from different makers means one maker's bug can't empty the wallet on its own.
What it takes
Desktop apps such as Sparrow, or Nunchuk on a phone, build the wallet from your devices. Besides each key's backup, save the wallet's descriptor, a short file that records which keys belong together. Without it, recovery is much harder.
Not financial advice.
Want to go deeper?
Is multisig worth it for a small amount?
Usually not. It adds steps and more backups to look after. Many people move to multisig once their savings would really hurt to lose.
What about services that hold one of the keys?
Some companies hold one of the three keys and help with recovery, while you hold two. Bitkey, Casa, Nunchuk and Unchained offer versions of this. You trade some independence for help if something goes wrong.