What is Multisig (Multisignature)?
A security feature that requires multiple private keys to authorize a Bitcoin transaction. For example, a 2-of-3 multisig wallet requires any 2 out of 3 designated keys to sign a transaction.
Why It Matters
Multisig provides security through redundancy and shared control. If you hold a 2-of-3 multisig wallet, you might keep one key with you, one key with a trusted family member, and one key in a safe deposit box. To spend the bitcoin, any 2 of these 3 keys are required—so you can still spend even if you lose one key, but a thief can't spend the funds by stealing just one key. This is far more secure than single-key custody. Large institutions and family offices use multisig extensively. It also enables interesting structures like requiring a 3-of-5 signature, meaning any three of five designated signers can approve a transaction. Multisig transforms Bitcoin security from "all or nothing" to a graduated system.
How It Works
A multisig address is created from multiple public keys, specifying how many signatures are required (the "m-of-n" scheme). For example, a 2-of-3 address requires any 2 out of 3 private keys to sign transactions spending from that address. When you want to spend multisig bitcoin, you create a transaction and it gets passed around for signing. Each required signer (at least 2 in this example) signs with their private key. Once enough signatures are collected, the transaction is complete and can be broadcast. Bitcoin's scripting language enforces this requirement—nodes verify that the proper number of signatures are present before accepting the transaction.