3.2 Multisig: Sharing Control of Your Coins

A multisig (multi-signature) wallet is a Bitcoin account that requires more than one key to spend. The shorthand is 'M-of-N': you set up N total keys and any M of them are required to authorise a transaction.

Common setups:

• 2-of-3 — the classic personal vault. Three keys, any two needed to spend. You can lose any one key and still recover, and a thief who steals one key still can't touch your coins.

• 3-of-5 — common for business treasuries or families, so several people must agree.

• 2-of-2 — both keys required, useful for joint accounts (but riskier: lose one key and the coins are stuck).

Why this is so powerful: it removes single points of failure. A single seed phrase has two failure modes — you lose it, or someone steals it. Multisig protects against both simultaneously.

In practice, you use 2–3 different hardware wallets (ideally from different brands) plus a 'coordinator' app on your computer (Sparrow, Nunchuk, or Specter) that helps build and broadcast transactions. The keys never leave the hardware; the coordinator just shuffles partly-signed transactions between them.

Multisig also makes inheritance much safer — you can store keys in separate locations or even give one to a trusted family member, with no single person able to spend on their own.