In the world of Bitcoin, security is king, and the choice between having a single or multi vendor multisig wallet can make all the difference. While multisig of course provides enhanced security, what are the trade offs when using a multi vendor approach? Are they worth it? Or should you just buy 3 or 5 of the same hardware wallet and get a discount? Let’s find out.
Contents
What Is A Multisig Wallet?
A multisig wallet is a cryptocurrency wallet that operates using more than one private key. While single sig wallets use only one key to sign a transaction, multisignature wallets can incorporate up to 15 different private keys that are all used to secure your funds.
A common example is a 2-of-3 setup, where there are a total of 3 private keys, but only any 2 are required to successfully sign a transaction and spend the funds. You can also have 2-of-2, 3-of-5 or even 7-of-9.
Why Use Multi Signature Hardware Wallets?
Multisig wallets allow for a whole host of additional features that are useful for both regular users as well as full blown multi-national companies such as:
- Increased Security: As there are multiple private keys protecting your funds, this dramatically increases the security of the crypto wallet in a number of ways
- Protection Against Lost Keys: Users often lose access to their private keys. They forget the PIN to their hardware wallet, forgot where they stored it or can lose it due to a natural disaster. Multisig wallets protect against lost Bitcoin as users are still able to recover funds even if they lose one private key
- Collaborative Custody: Businesses that wish to hold bitcoin can not only increase their security, but also enable unique use cases like requiring multiple company board partners to agree before company funds are spent
- Inheritance Planning: Using a multisig wallet enables users to create simple or complex inheritance setups that let them retain control over their funds, whilst still allowing for recovery of them when they pass away
We have a full, step-by-step guide on How To Create A Multisig Wallet that covers each and every step from creation to sending and receiving as well as proper back up and restore. Whichever way you build your multisig wallet, you should pair it with the top of the line hardware wallets below in order to ensure it’s the best it can be.
Multi Vendor Multisig
So once you’ve decided to go multisig the question then becomes should you make your multisig wallet out of the same hardware wallets? Or should you consider making it a multi vendor multisig wallet?
This is where your various hardware wallets are sourced from different manufacturers. For example, rather than having a 2-of-3 multisig wallet with three BitBox02‘s, you might instead have one BitBox02, one COLDCARD Mk4 and one Foundation Passport.
This can make your multisignature wallet more secure, but also more complex, so lets go through a few of the pros and cons.
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