What Is a Multisig Wallet?
Multisig (multi-signature) is a security setup that requires approval from more than one private key before funds can move. In a 2-of-3 multisig, any two of three keys must sign each transaction.
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Multisig, short for multi-signature, is a security setup that requires approval from more than one private key before funds can move. With a single-key wallet, one stolen key means everything is gone; multisig removes that single point of failure. It is widely used by company treasuries, DAOs, exchanges and individuals holding large amounts.
How does multisig work?
Multisig wallets are described as “m-of-n”: n is the total number of keys, and m is the minimum number of signatures needed for a transaction. Common setups include:
- 2-of-3: Any two of three keys can sign. Funds stay safe even if one key is lost or stolen.
- 3-of-5: Three of five keys are required. Popular for corporate treasuries and team-managed funds.
- 2-of-2: Both keys must sign. Stronger against theft, but losing either key locks the funds.
One signer proposes a transaction, the others review and sign it on their own devices, and once the threshold is reached the transaction is broadcast.
Multisig on Bitcoin and Ethereum
On Bitcoin, multisig is supported natively through the protocol’s Script language. The P2SH address type, added in 2012, made it far easier to use, and today addresses beginning with “3” or “bc1” can be multisig. On Ethereum, multisig is built with a smart contract; the most widely used is Safe, formerly known as Gnosis Safe.
Who should use multisig?
A team can set up a 3-of-5 wallet so no single executive can empty the treasury. A DAO can hand fund management to signers elected by token holders. An individual might store three hardware wallets in different places under a 2-of-3 setup, protecting against both theft and the loss of one device.
More signatures aren’t automatically better. If one signer is unreachable for weeks, day-to-day operations can stall. Plan for usability and for what happens when a key goes missing, not only for security.
Does multisig eliminate every risk?
No. In February 2025, attackers stole roughly $1.5 billion from an Ethereum cold wallet belonging to the exchange Bybit. Rather than stealing the keys, they manipulated the interface the signers used; the signers believed they were approving a routine transfer but actually signed a transaction that handed over control of the wallet.
Two lessons follow. Every signer should independently verify what a transaction actually does, not just the summary on screen. And keeping all the keys on one computer, or with one person, undoes most of the protection multisig is meant to provide.
What needs to be backed up?
Backing up each key’s seed phrase is often not enough. To rebuild a Bitcoin multisig, you also need the wallet descriptor, which records the other signers’ public keys and the setup’s rules. For Ethereum-based multisigs, keep a record of the contract address and the network it lives on.
Frequently asked questions
Are multisig transactions more expensive?
Usually, yes. Extra signatures add data to Bitcoin transactions, raising fees, and on Ethereum both the contract deployment and each transaction consume additional gas.
Is multisig the same as MPC?
No. With multisig, each signature is verified separately on-chain. With MPC (multi-party computation), one key is split into shares and a single signature appears on-chain.