I am happy to be participating in the cyptoacademy week 5, this is an extensive lecture by @sapwood but i really love the challenge to learn and gain new knowledge, so u can read my homework post below
sourceWhat is a Multi-sig wallet? How is it different from a Single key wallet? What are the different uses of a Multisig wallet?
A multi-sig wallet is simply a wallet that require multiple signature probably 2 or more to sign before a transaction can be processed in other words it requires 2 or more private keys to process a transaction
so therefore in a layman term assuming I have a safe house door that requires atleast 2 of 3 fingerprints before access is given, the finger prints of 3 separate individuals will be required then. I hope you understood the analogy
the multi-sig wallet has series of m and n combinations where
m stands for number of signatures
n stands for number of cosigners
there are some combinations of 'm and n' which can be 2 of 3, 3 of 5, 5 of 7 etc
How is it different from a Single key wallet?
There are some key notable differences between the multi-sig and the single key wallet first we can denote from the name, the multi-sig wallet requires 2 or more users while the single key wallet requires just one user
the single key wallet requires just one signatory while multisig wallet requires 2 or more to sign as a group before transaction is possible
What are the different uses of a Multisig wallet?
- Used for a cooperate business platform
- Used to secure family funds
- Used for a great level of security
- it gives rise to quick decision making and concensus between members
Download, install & set up a 2-of-3 BTC Multisig wallet(Electrum)? What is the difference between Seed key and MPK? Would you share the seed key or MPK with your co-signer and Why? (Screenshots Needed)
There are a few steps and procedures that we need, in order to create a 2-of-3 BTC Multisig wallet(Electrum), which will be listed below
go to https://electrum.org/#download
after the download, run and click on install
rename the wallet to your preferred
click on multi sig wallet then click next
set to the combination you wish to have, so i will be using a 2 of 3 multisig wallet
select create a new seed and click next
copy your seed and keep it safe, then re-confirm it
it generates your MPK(Master Public Key), keep it safe and share with your cosigners
Repeat the process for the other cosigners and let them share it with you
Input the MPK(Master Public Key) of your cosigner 2 and 3
- Now set your password and you are set
What is the difference between Seed key and MPK?
seed key is a 12 word phrase that should never be shared or revealed in a transaction or any means, and can be used to create a recovery
while MPK is a public private key that is used to authenticate a transaction by co-signers in order ensure a safe transaction. it is a key given to every user to enable the creation of the multisig wallet
Would you share the seed key or MPK with your co-signer and Why?
I would not share my seed key with my co-signers but i can share my MPK with my co-signer because the MPK is essential to share with cosigners atleast to enable the creation of the multisig wallet
How many different "m of n combinations" Multisig wallet you can construct in Electrum? How do you Export your Seed & Private Key(Electrum) in a Multi-sig wallet? (Screenshots needed)
How many different "m of n combinations" Multisig wallet you can construct in Electrum?
i will be using a mathematical approach to generate this answer
since we know that the minimum can be 2 by 2 and a maximum of 15 by 15 then we can use a mathematical approach of combination usong the formular nCr=n! / r! * (n - r)!
doing a 15combination2(15C2)
15!/2!*(15-2)=105
so therefore we have 105 different possible combinations ranging from 2 to 15 combinations in the multisig wallet
It will be great to bring to our notice about the N of N and the M of N
N of N is simply when we have equal number of digits and all of them are required to sign eg 2 of 2, 3 of 3 etc
Because we were asked of just M of N
Since we have 14 possible N of N in 105 combinations we will substract to get our accurate number of m of n
105-14 = 91 possible M of N combination allocated in a minimum of 2 and a maximum of 15
How do you Export your Seed & Private Key(Electrum) in a Multi-sig wallet? (Screenshots needed)
To export the seed, click on wallet and click on seed
Input your secret password
your seed will be displayed
How to export your private key
- click on wallet, click on private key, navigate to export. you will receive a warning prompt, click ok and input your password and your private keys will be displayed
Perform a real transaction(Send BTC) to another Address using a 2 of 3 Multisig wallet? (You can perform a micro-transaction for this Task, also send a partial amount to demonstrate your experience with Change Address, screenshots needed).
First of all I started with the changenow application to reduce my transaction fee while transferring from binance converted a few tron asset and the bitcoin was transferred to my standard account and then i transfer from my standard wallet to my multisig wallet
you can see screenshots below
After transferring 0.25mbtc to my multisig wallet, then i initiated a send btc command to another address , put the amount you wish to transfer, for this purpose, i will be transferring 0.23mbtc, click on send then export the QR code for the cosigners to confirm
see screenshots below for understanding
after exporting the QR code, send to our cosigners and they scan the QR code and sign then the payment will be confirmed
see screenshots below
What is the difference between Receiving Address & Change Address? Demonstrate your experience with a Change Address?
The change address is something that we really have nothing to do with when we send an asset lets say 0.223 btc and remaining 0.007 btc the electrum will send the remaining to the change address
while the receiving address is the address that is used to receive asset or receive a transaction
CONCLUSION
it was really a stressful but inspiring homework i commend the lecturer for bringing this to our platform, the multisig wallet is a wallet I will suggest for companies, families and even group of friends who wish to save up together
thank you all for reading my blog I am @kelechisamuel
best regards
@sapwood