If you are not securing your coins with a hardware wallet, you are just risking your funds. Till now multisignature cryptocurrency wallets are proved to be highly secure rather than single-signature wallet. So keep your coins out of theft’s touch and deposit your faith in multisignature cryptocurrency wallet.
Cryptocurrencies have come in place to fulfill the lack of existing financial aspects. But cryptocurrency faced several unexpected and untoward incidents after its appearance that led to loss of funds of depositors. Deposited funds are prone to theft by hacking, even from a broker’s digital wallet. No cogent solution to the issue has yet appeared, but some brokers are strengthening the trust of users by providing insurance against theft.
In this situation, multisignature cryptocurrency wallets are raising hope with its built-in way of managing this kind of risk. These wallets are protected by multiple cryptographic signatures indeed.
But last month’s OKEx incident taught us that we should not put all our faith in multisignature wallets. A private key holder of this exchange is with authorities over an investigation leading the crypto outflows from OKEx be at zero. But hazards related to transactions which are immutable of digital bearer assets can be mitigated using multisig.
Working process of multisignature crypto wallet
With multisignature crypto wallet, one can choose how many keys are allowed to open the vault to unlock it just similar to a bank. Hardware wallets are considered to be secure because setting up multisignature is possible with these. With this setup, a new multisignature address is created which is unique.
Not only retail investors but also exchanges and crypto companies are coming under the shade of multisignature wallets to secure their funds. Hackers can’t access funds without those keys. Adding more signatures bolsters the security of funds and hackers become unable to access account. Not only Bitcoin but also other cryptocurrencies can be secured by multisignature crypto wallet.
Still a complexity
Unlikely to single-signature wallet, a multisign wallet doesn’t belong to any back-up mechanism by design which is a core limitation. You won’t have access to the whole vault once you lose the seed phrases and majority of the wallets. Those who are not technically smart to them multisignature wallet software is still a complexity. Maybe the software will be improved with the upcoming Taproot upgrade.
Till now multisignature is the most secure way to safeguard stored cryptocurrency against any theft because a thief cannot access to your account even if he owns one of your wallets. But the only complain is using multisignature is complex for average users.
Setup process of multisignature wallet
The setup process was really difficult back in days but nowadays it remains no longer hard because wallet softwares streamline users the multisig setup process and provides customer support and other key management services. Blockstream, Casa and Unchained Capital provide key management services for Bitcoin custody indeed.