The HD (identity) wallet or multi-chain wallet we use daily can usually only be stored through one public key. This means that whoever knows the private key that matches the public key can control the assets held on the public key chain. Therefore, in order to solve the key problem, multi-signature technology came into being.
Today we will talk about the meaning, function and significance of the multi-signature mechanism.
Multi-signature wallet concept
Multi-Sig stands for multi-signature, which is a specific type of digital signature that allows more than two users to sign as a group. Therefore, multi-signatures are generated by combining multiple single signatures.
For example, imagine a safe with two locks and two keys, one key held by A and the other by B. The only way to open this safe is for two people, A and B, to provide the keys to unlock the lock at the same time. If you only have one of the keys, you cannot open the safe.
Generally speaking, it means assigning the asset control rights of the wallet address to more than two people, which can help users better protect their wallet assets.
Glossary
Wallet private key: used to send funds and verify transactions. The private key of the decentralized wallet is held by the user himself, and the user is responsible for protecting the security of the private key.
Wallet Public Key: Public keys are typically used to encrypt session keys, verify digital signatures, or encrypt data that can be decrypted with the corresponding private key.
Wallet address: It is a hashed version of the public key. When a user wants to receive funds, he reveals his wallet address to the other party.
The difference between single signature and multi-signature wallets
Single-signature wallet is currently the most common wallet form among blockchain wallets. Currently, the wallet addresses held by most people are single-signed wallet addresses, and the wallet assets are only controlled by the private key or mnemonic phrase, which means that anyone can control the funds as long as they hold the corresponding private key. This also means that only one key is needed to sign a transaction, and anyone with the private key can transfer tokens in the address without any authorization.
Compared with multi-signature wallets, single-signature wallets are more convenient to manage, but also involve greater risks. It is precisely for this reason that criminals often obtain users' single-sign wallet private keys through phishing websites or pretending to be customer service, and steal user assets.
Multi-signature wallets provide a solution for this kind of risk prevention. By setting multiple people to jointly manage an address, a set number of managers must sign and agree before the assets in the address can be used. This greatly reduces the risks caused by unilateral private keys. Risk of asset theft.
The biggest feature of a multi-signature wallet is that it requires authorization from multiple private key holders to perform wallet transactions. Normally, the "m-n mode" needs to be confirmed when creating a multi-signature wallet. Only m holders of these n private keys jointly sign and authorize the transfer and transaction of the cryptocurrency corresponding to the wallet address. Wait for operations.
"2-3 mode" is the most common operating mode in multi-signature wallets, that is, each transaction requires 2 of all 3 private keys for signature authorization to be completed, which can better balance security and convenience. Relationship.
Advantages of multi-signature wallets
1. Improve wallet security
In a single-signature wallet, the private key that determines the ownership and management rights of cryptocurrency is only in the hands of the individual. Once the private key is lost or the holder forgets the wallet private key or mnemonic phrase, it means that the holder loses the right to control the cryptocurrency. Control of the wallet address and the cryptoassets associated with it will be completely lost. The existence of multi-signature wallets minimizes the risk of asset loss when a single private key is lost.
Multi-signature wallets greatly help users reduce security incidents caused by private keys being lost or stolen. Since a multi-signature wallet is controlled by two or more wallet addresses, even if the private key of one of the wallets is leaked, the wallet assets of the multi-signature address cannot be transferred, which greatly reduces the risk of asset theft.
Taking the "2-3" multi-signature wallet mode as an example, among all three private keys, as long as two private keys complete the signature authorization operation, the relevant cryptocurrency can be transferred. Even if one private key is lost, the transfer of assets can be completed through the remaining two private keys to avoid asset losses.
2.Multiple verifications to avoid erroneous transactions
Multi-signature wallets are also used to perform multiple verifications to avoid erroneous transactions. During bank remittance, if bank staff or users make mistakes when entering their account numbers, the transaction will fail and the money will be returned to the original account; transactions on the blockchain are irreversible. Once the encrypted assets are transferred to If the payment address is incorrect, the asset will not be returned. Using a multi-signature wallet, when a private key owner initiates an erroneous transaction, other private key holders can block the erroneous transaction by refusing to sign when they discover the error. The more people involved in signature verification, the less likely a wrong transaction will occur.
Summary content
Since multi-signature wallets require multiple signatures to complete fund transfers, multi-signature wallets provide higher security. However, currently users do not know enough about multi-signature wallets. We will continue to educate users about more blockchains. Knowledge helps users understand and keep learning!
