Multisig

A multisig, or multi-signature, is a way to secure bitcoin so that spending it requires approval from more than one person. Rather than sending bitcoin to a single address controlled by one private key, a multisig address is created so that multiple people each hold a private key, and a set number of those keys must sign off to access the funds. This is useful for shared ownership—like between business partners, organization members, or families—since it ensures that no single person can move the funds alone.

The most common form of multisig is called m-of-n, where “m” signatures out of “n” possible key holders are needed to spend the bitcoin. For example, in a 2-of-3 setup, there are three keys, but any two of them can sign to authorize a transaction.

Most multisig addresses on the Bitcoin blockchain use a method called P2SH (pay-to-script-hash), so these addresses typically begin with a “3”. The specific rules for unlocking the funds (for example, which keys are required) are kept hidden until the funds are actually spent; this script is called the RedeemScript. It’s important for the key holders to safely store this script, since it’s needed to move the funds from the address in the future.

Here’s a simple illustration: Suppose Alice, Bob, and Charlie start a business together. They each control a private key, and they agree that at least two of them must sign to access their company’s bitcoin. Their shared 2-of-3 multisig address ensures that no one can take the funds without agreement from at least one other partner, adding a layer of security and mutual trust.