Understanding Multisig Wallets
• Multisig wallets have existed in Bitcoin since 2012 and offer an extra layer of security in self-custody practices.
• Online threats such as malware, hacks and phishing attacks are always present, putting funds at risk of being lost.
• Collaborative custody wallets involve the use of a third party to manage one of the private keys, while self-custody wallets involve managing the distribution of private keys on your own.
Benefits of Using Multisig Wallets
Multisig wallets offer a great security aid for digital asset holders by providing an extra layer of protection against online threats like malware, hacks and phishing attacks. In addition, DIY wallet options are available for those who prefer to build their own device that generates private keys without leaving any trace. This approach offers users from countries where conventional hardware wallets may not be available the opportunity to secure their funds with a low-cost solution.
Collaborative Custody Wallets
A collaborative multisig wallet is likely to provide 2-out-of-3 key management where one key is held by the user and two more are managed by the third party – an exchange or custodial company – with one held online and another offline in cold storage. This provides users with convenience but requires them to sacrifice privacy as KYC procedures may be necessary when using certain services. Furthermore, these types of wallets may also face geographical limitations depending on where they can be accessed globally.
Self-custody wallets allow users to solely manage their private keys without relying on a third party service provider or exchange. This way users maintain full control over their funds at all times while still enjoying added security measures offered through multisig technology. However, this type of setup requires technical knowledge in order to properly set up and use it securely, making it more suitable for tech savvy individuals or those willing to learn how it works before taking advantage of its benefits.
Best Multisig Wallets Available
When choosing a multisig wallet it’s important to consider what level of security you require as well as whether you need collaborative or self-custody solutions depending on your specific needs. Some popular options include Casa which offers free basic wallet services with no KYC policy requirements; Gnosis Safe which provides smart contract support for multi signature transactions; BitGo which supports multiple blockchains; Blockstream Green which supports both Segwit and legacy addresses; Electrum Wallet which allows you store your coins securely without having to download the entire blockchain; and Cobo Vault Pro which offers advanced features such as dual chip architecture and airgap technologies for maximum protection against physical tampering attempts..