What is Multi-Signature Custody?
Multi-signature (multisig) custody requires multiple private keys to authorize a blockchain transaction. Common configurations include 2-of-3 or 3-of-5, where a threshold of keyholders must approve.
Benefits
- No single point of failure: One compromised key insufficient
- Shared control: Distribute authority across team members
- Fraud prevention: Requires collusion to steal funds
- Recovery options: Lost key can be replaced if threshold met
Common Use Cases
- Corporate treasury management
- DAO governance
- Exchange cold storage
- Institutional custody solutions
Limitations
On-chain visibility, higher gas costs, chain-specific implementations.