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Multi-signature (multisig) wallets are an essential security feature in the world of cryptocurrency, designed to prevent unauthorized access to funds.
Here’s a detailed thread explaining what a multisig wallet is and why it is considered highly secure:🧵
Definition:
A multisig wallet is a cryptocurrency wallet that requires multiple private keys to authorize a transaction, unlike a regular wallet that needs only one. It can be set up to require several keys (e.g., 2 out of 3 or 3 out of 5) to complete a transaction.
Working:
1. Multiple Keys: A multisig wallet is created by defining a set of private keys. For example, in a 2-of-3 setup, three keys are created, and at least two of them are needed to authorize a transaction.
2. Authorization: When a transaction is initiated, it must be approved by the required number of keys (signatories). This ensures that no single party has complete control over the wallet.
3. Distribution: The private keys can be distributed among different individuals or devices, adding an extra layer of security.
Example: Imagine a wallet set up as 2-of-3 multisig:
Key 1 is held by Person A. Key 2 is held by Person B. Key 3 is held by Person C.
To move funds, at least two out of the three keys (A, B, or C) must sign the transaction.
Why is it impossible to hack a Multisig Wallet?
Security Benefits
1.Multiple Points of Failure: Hacking a multisig wallet is much more difficult because an attacker needs to compromise multiple private keys which are often held by different people or stored on separate devices.
2. Enhanced Security: Even if one private key is compromised, the attacker still cannot authorize transactions without the other required keys.
3. Redundancy: In case one key is lost or inaccessible, the remaining keys can still authorize transactions, ensuring that funds are not lost.
Real-World Scenarios:
1. Business Security: Companies use multisig wallets to prevent any single employee from having full control over the funds. This requires collaboration and approval from multiple parties.
A lot of noobs are thrilled by Pre-market calculations, dreaming of becoming millionaires. They often miss that 99% of coins lose 70-80% of their value post-listing because the real action happens when the market opens, with many sellers ready to dump.
A lot of noobs are thrilled by Pre-market calculations, dreaming of becoming millionaires. They often miss that 99% of coins lose 70-80% of their value post-listing because the real action happens when the market opens, with many sellers ready to dump.
But what most don't see his how undervalued these projects are relative to the total value of each narrative.
DePIN = $18.3 Bil MC AI: $22.9 Bil MC RWA: $26 Bil MC SOL: $246 Bil MC DeFi: $77 Bil MC
While there's no easily accessible direct measure Web 3 L1 market cap measure, just look at all those above these 3 listed.
Now compare the tech, utility and community & you'll see why I'm betting on these L1s. Now compare the tech, utility and community & you'll see why I'm betting on these L1s.
I personally believe each of the projects listed in these boxes are incredibly undervalued to their narratives.
More importantly, I have conviction that their values will be realized this bull cycle🔥