What Is A Multi-Signature Wallet? Why Do I Need One?

If you are new to Bitcoin, you have probably been inundated with new words that you are trying to understand what they mean.

If you are feeling a little overwhelmed, I totally get it, as we have all been there at one time or another. Learning the ins and out of Bitcoin lingo is similar to learning a new language. The only way to become proficient at it is to keep learning and applying what you know to the real world.

I am about to throw another term at you that you need to become familiar with to secure your Bitcoin properly. Most people new to Bitcoin typically acquire their first sats using an app downloaded on their cell phones.

This is considered a hot wallet as it is always connected to the internet. A wallet that is always connected to the internet has the potential to be hacked by an outside intruder. I am not saying that you shouldn't download a Bitcoin wallet to your phone, but it is safe practice to keep only small amounts of Bitcoin on a hot wallet.

If you are ready to invest some serious capital into Bitcoin, you must buy a hardware wallet and use a multi-signature wallet to protect your Bitcoin.

If you are thinking, "What the hell is a multi-signature wallet, and why do I need one?" it's ok; I got you. I'll walk you through why you need one and how it is the ultimate form of protection against theft.

Mult-Sig Is The Best Way To Secure Your Bitcoin

A multi-signature wallet or "multi-sig" isn't as complicated as it sounds. For example, your hot wallet on your phone can send Bitcoin simply by entering the address and hitting send. This is considered a "single signature" transaction. The private key on your device signed the transaction, and that is that.

With a multi-signature wallet, you need more than one device to sign off on a transaction. So if you follow the same steps of sending a single transaction action, you can only finish sending the transaction with the private key from a hardware wallet such as Ledger, Tezor, or Keystone.

Multi-sig adds a layer of protection that makes it impossible to steal your Bitcoin. There are a few vendors that can help you set up a multi-sig wallet with ease.

Casa Wallet

If you want an easy way to set up a multi-sig wallet, check out Casa Wallet. Casa has become a leader in the industry for creating a user-friendly self-custody experience.

For as little as $120 a year, you can have a secure 3-key multi-sig wallet. With Casa, your phone acts as one of the private keys, a hardware wallet you purchased would be the second key, and Casa holds the third key.

If you lose your private keys, you can rest easy knowing that you have a company that can assist you in an emergency. If you are ready to self-custody your Bitcoin, you can't go wrong with Casa.

Nunchuk Multi-Sig

You should check out Nunchuk if you want a more hands-on experience. With Nunchuk, you can create your DIY multi-sig wallet for free!  They also have an "Iron Hand" package similar to what Casa offers for $120 a year. Nunchuk also has a "Honey Badger" plan for $450 a year that unlocks an exciting set of features such as:

• Configurable spending limit
• Seed and seedless backup options
• Scheduled payments
• Inheritance planning

The inheritance feature is quite compelling and worth exploring further. We will not live forever, and having an inheritance plan will ensure your Bitcoin goes to your loved ones.

Blue Wallet App

If you are looking for a more bare-bones multi-sig experience with no inheritance plan or third-party key management, Bluewallet is a solid choice. Download the BlueWallet app on your iOS and Android device and create a multi-sig vault on your phone or Ipad.

Bluewallet gives you the ability to determine how many keys to use and what address types and supports QR codes and Partially Signed Bitcoin Transactions (PSBTs), which helps you avoid plugging in a wallet to a PC that could be compromised.

Regardless of what option you go with, upgrading the security of your Bitcoin is highly recommended. If Bitcoin does what we expect it will do, do you want to have your Bitcoin wealth secured by a single-signature hot wallet?

You are just asking for trouble.

Lock down your Bitcoin with a powerful multi-sig wallet and sleep like a baby at night!