What is a Multisig Wallet?
A multisig wallet is a type of Bitcoin wallet that requires more than one private key to access funds. This provides extra security against online threats such as malware, hacks and phishing attacks, as well as the risk of losing your own private keys.
Advantages of Multisig Wallets
Multisig wallets offer increased security for digital assets by using cutting-edge technology suitable for less tech-savvy users. They are also beneficial for those in countries where conventional hardware wallets are not available due to delivery services or regulations. DIY wallets allow users to build their own device with no trace, securely generating private keys and providing low-cost solutions.
Collaborative Custody Wallets
Collaborative custody wallets provide 2-out-of-3 key management, whereby the user has control over one private key while the third party holds the second key online and the third key offline in cold storage. The advantage of this solution is convenience and customer service if anything happens; however, it may require KYC procedures to use services which comes at the expense of privacy. Furthermore, collaborative multisig wallets have geographical limitations.
Self-custody wallets are those where only you manage the distribution of your private keys; thus providing extra privacy whilst still getting access to customer support when needed. An example of such a wallet includes Casa which offers a free basic wallet with no KYC policy required.
In conclusion, multisig wallets provide an extra layer of security when it comes to storing Bitcoin safely and securely – whether it’s through self-custody or collaborative custody methods. With DIY devices being an option for added protection, users can better protect themselves from potential risks associated with digital assets like rug pulls and bankrupt exchanges.