Sep 21, 2020 • 5M

Episode 25 - Multi-Signature Wallets (MultiSigs)

 
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Gautam Dhameja
Block Shots provides a basic understanding of the most important blockchain concepts in five minutes. Learn about blocks, transactions, consensus, finality, governance, etc. and many more fundamentals while having your morning coffee, commuting, or whenever you’ve got a moment.
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Every transaction in a blockchain is signed by the sender. The signing of transactions is done using cryptographic signing algorithms, as described in episode 6 of the podcast.

In some scenarios, to perform an operation on the blockchain, there is a need to have more than one signatures on a transaction. Think of bank accounts with joint holders. Similarly, blockchain wallets could also be owned jointly by a group of accounts. These wallets are called multi-signature wallets or multi-sigs.

Multi-signature wallets are generally implemented using smart contracts. One of the smart-contract function acts as a gatekeeper for other functions and keeps track of the number of accounts needed to call a function. Once enough accounts have called this gatekeeper function, it then forwards the call to the intended function. This is how, in simple terms, multi-sigs work.

Because they are implemented using custom logic on the blockchain, multi-signature wallets can have any combination of signatures configured to use. We can have a threshold, majority, super-majority, specific accounts, and many other kinds of signature configurations in multi-signature wallets as per the need of our application.

Multi-sigs are useful in scenarios where a joint decision is needed to make a transfer or execute a function on a blockchain. For example, the transfer of funds from an organizational account where all or some of the board members must sign the transaction individually.

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