multisignature wallet
A multisignature wallet requires more than one key to approve a transaction — an 'm-of-n' policy such as 2-of-3 or 3-of-5. No single key can move funds alone, which removes the single point of failure that plagues ordinary wallets: a thief who steals one key, or an owner who loses one key, still cannot unilaterally spend or lock everyone out. It is the standard for treasuries, exchanges, DAOs, and anyone guarding serious value.
There are two main ways to build one. Script-based multisig, native to Bitcoin, encodes the m-of-n rule directly in the spending conditions (for example via OP_CHECKMULTISIG or, in modern Taproot, key aggregation), so the chain itself enforces that enough valid signatures are present. Contract-based multisig, common on Ethereum and exemplified by Gnosis Safe, implements the policy as a smart contract that collects signatures and only executes once the threshold is met — which also unlocks richer features like changing the signer set, daily limits, and modules, since it is just programmable code.
Multisig should not be confused with an MPC or threshold-signature wallet. A multisig produces several distinct on-chain signatures and the m-of-n logic is visible and verified on-chain, costing more gas and being somewhat chain-specific, but its rules are transparent and auditable in a contract or script. MPC instead produces a single signature off-chain and keeps the policy in a cryptographic protocol. The practical trade-offs of multisig: it is robust and well-understood, but on-chain transparency reveals your security structure, coordination among signers adds friction, and on Ethereum the gas overhead is real — though account abstraction now makes contract multisigs first-class, programmable accounts.
The point of m-of-n is balancing theft resistance against loss resistance. A high threshold like 4-of-5 resists theft but makes you more likely to be locked out if keys are lost; a low one like 2-of-3 is more forgiving but easier to attack. Choose the split for your actual threat model, and keep signers diverse and independent.