Hi friends, In this lecture from @sapwood I learn a new concept of Decentralized Multisig Wallet details and its use cases.

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Thanks for making it like a wonderful lecture to us.

What is a Multi-sig wallet? How is it different from a Single key wallet? What are the different uses of a Multisig wallet?

For this question first, we can understand what is meaning of a Multi-sig wallet.

Multi-sig wallet Means:-

Here that wallet name Multi-sig wallet itself indicates Multi-Signature Wallet Means for process any Transaction from this wallet we need more than one signature to approve that Transactions.

In our real life, I think all of us are well aware of Bank Locker services too. Here we can keep our things safely in Bank lockers for paying some service charges to Bank.
On creating an account for taking Locker services they provide one key to us, another they keep themselves.

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But here we can think on using that one key Bank officials may theft our things, but Here it not happens at any cost, Because they not possible to access without our key. Here that locker is designed with Two Key Security features, without using those Two keys that locker is not possible to open.

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So until our permission using one key, they cont do anything, which Means for doing any Transaction like this Multi secure locker we need another one permission to access it.

Along with general important things we keep our things in our locker, here we need one key for access because it's having one single key. So no need for More than one key to open it.

The same concept we can see in Crypto also. In general, we keep our assets in different wallets like Exchanges, Decentralized wallets, Hard wallets and many more places. Those are all accessed using one single Private key, Those not having Multiple Private Keys to access. Because those assets are owned by ourselves, so I am the owner of it, so no need for others permission to access them, that's why we use Single Wallet Keys for our needs.

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But some people together invest in crypto, for security purposes and not get any issues in their share they will hold their assets in Multi-Sig Wallets because here for approve transaction it needs more than one signature to approve it. Until getting another approval it does not process the Transaction. So here one person is not possible to do any Transaction without getting another co-related person Permission.

So here each one gets equal access rights, without others permission not possible to access those assets at any cost.

If that group person creates Multi-sig wallets for holding our assets, Then they get another layer of security 🔐 and live happily without having any tension because here one single person not possible to access that assets without others permission.

Multi-sig wallets are very useful for Joint investors, Big Organisations and many more persons to use for their needs.

How is it different from a Single key wallet?

Single key wallets and Multi-sig wallets both having a lot of differences because both are wallets but accessing those is different from each other.

Different uses of a Multisig wallet

Now Multisig Wallets becomes more popular for holding crypto curries because of its unique use cases. A lot of them now preferred this type of wallet for securely holding their currencies.

Enhanced Security :-

Here for accessing Multisig wallets we need more than one key and need to sign more than one signature for Transfer Founds.

Hacking Multisig wallets is not so easy.

For Example, Peter creates a Multisig Wallet for holding his Bitcoin. He creates 2-of -3 Multi addresses, one on Laptop, one on his Mobile, one on Tablet. Then after he connects all on adding those Master Public keys.

If he lots his Mobile, he can also access his wallet using the other two devices.

If Hacker Hack his Laptop also, hacker not possible to access his wallet because he needs to again hack his Mobile or Laptop, and need to approve one more signature from those. But hacking all devices at a time it's not so easy, impossible too.

That's why here we enhance our wallet security by creating Mutisig wallets for holding our assets.

Escrow Transactions

In business persons on using Multisig wallet than can do some Escrow Transactions for providing Trustworthy of them.

For Example, Jone is a Businessman, he orders some Goods from Mr Josh company. But Josh wants payment first, then he delivers his order, but Jone not having 100% confidence in his words.

In this situation, they can create one Multisig wallet on taking Middlemen to help. Then can solve this issue. Here Multisig Wallet provides Escrow services for Jone and Josh. So bother are happy because when the order delivered immediately founds Transfer to Josh without any delays.

Like that Escrow Transactions, we can do on using Multisig Wallets.

Decision Uniformity

For example in an Organization there are 7 members, all are connected with a Multisig wallet for accessing Company Money and set 5-of-7 wallet.

So here one one board member not possible to access that wallet, here he need 4 other members signature for moving funds. Without other members permission he cont do anything.

So here we can avoid Money stolen from Board Members. And also it gives more security to the Company wallet.

Like the different unique use cases, we get from Multisig Wallets.

Download, install & set up a 2-of-3 BTC Multisig wallet(Electrum)?

At present in the market, there is a lot of platforms offering for creating Multisig wallets. But from this Electrum is the most popular and trusted one.

So I using the Electrum platform for crating my Multisig Wallet. So first I go to their official website.
https://electrum.org/#download

After clicking We get this screen, From this select Windows Installer

After Downlode , Just Install in your Computer.

In a few Seconds, it Installs on your computer.

_{Successfully Installed Electrum Wallet}

Now just open Electrum Wallet, now you get this screen.

In default it creates wallets with the name of default_Wallet1, If you wish you get to set your desire name, then click Next Tab.

Now it asks what type of wallet you need, Here select Multi-signature Wallet then click Next Tab

Now we get like this window, On moving the cursor here we need to select how many cosigners and how many signatures we need.

Here we creating 2-of -3 wallets so I choose 3 cosigners and 2 signatures required. So I set it like this, then click Next tab.

Then select create a new seed then select Next tab.

Now it shows our Private seed, Just copy it down on paper. This key we must hold security for retrieve our wallet. So wrote it down on paper. After writing down just click on the Next tab.

Now again it asks to confirm the seed. So just entering that 12-word private key, then select *Next tab.

Now it shows one Master Publick key, Master Public key always start with Z, copy this file and share with your co-signers, then click on Next tab.

Now our work is not yet finished, On doing the same process by our co-signers, they must share their Muster Publick to us, on entering those Master Publick keys in each one wallet we need to create our wallet.

Here we also creating Multisig wallets, so here minimizing that screen again start creating another 2 new Multisig wallets, then copy those Master Publick Keys in one place.

Now I again continue to set up our first Multisig wallet, now we get this screen. Here select Enter cosigner key then click Next tab.

Now here enter the second wallet Master Public key and select the Next tab.

Now we get this screen, here again, select Enter cosigner Key then select Next tab.

Now here enter the Third wallet Master Publick key then select Next tab.

Now it asks us to set an encrypted password for our wallet. Just set your Password then click the Next tab.

Now our Multisig wallet is ready to use.

But here all process done by our self, so now we just finish one wallet set up, remaining two wallets are still pending so on entering others Two wallets Master Publick Keys, just finish set of other 2 wallets also on repeating the same process.

In this process I get a lot confused, finally, after taking one friend help I finish my set-up successfully.

_{My Multisig 2of3 Wallet}

Like that we can create Multisig wallets very easily.

Here you can also see all my cosigner wallet receiver address also same. This means I finish my process perfectly. Like that we can recheck, those are connected correctly or not.

_{All Wallets Receving Address Are Same}

What is the difference between Seed key and MPK?

The seed key is the private and personal key of our wallet. We need to keep this key securely, This key we don't share any anyone.

If we share this key, they can access our wallets very easily.

One more thing is we can restore our wallet to any devices using this private key as per our needs.

Coming to MPK(Master Publick Key), for connecting multiple wallets we use this key. Without this not possible to connect wallets. This key we must share with our cosigner for connecting our wallets.

Here we connecting our wallets using MPK, but accessing assets we need to sign it, these rights only get the owner of that wallet, not possible to access other wallet owners rights by the cosigner.

This means here wallets are connected internally with help of MPKs but access right only preserves to that wallet owner. Means all cosigner can check the wallet, but not possible to access it without another cosigner permission.

Would you share the seed key or MPK with your co-signer and Why?

Here we only share MPKs, Don't share your wallet Private Key with the cosigner.

If we share means you losing your access rights on your wallet and give them to your cosigner. It's not a good deal.

If you give your private keys along your MPKs, Then your cosigner no need to wait for your signature for accessing the wallet, he alone can do that process without your permission. So only share your MPKs with your cosigner don't share your wallet private key with anyone.

How many different "m of n combinations" Multisig wallets you can construct in Electrum?

In Electrum Minim M=2,Maximum M =15

And Minimum N=1, Maximum N=15.

Here we creating M of N combination Wallets.

So we can create 2 of 1 to 15 to 15 combinations.

It may be 2 of 1,3 of 2,3 of 3, like that it goes.

_{Minimum Combination}

_{Mazimum Combinations}

How do you Export your Seed & Private Key(Electrum) in a Multi-sig wallet?

Sometimes we miss the Seed of your wallet but remember your wallet password. Here we can Export our wallet seed using our Password.

For this just go to your wallet, then select Wallet tab., Then select Seed

Then it asks you to enter a password, On giving it just select the OK tab.

Now it shows our wallet seed, just wrote down safely.

Like that we can Export our seed.

For Export our private keys, again go to your wallet, then select Private Keys then select Export tab.

Now on giving wallet password, just select OK tab.

Now it gives a warning, just select the OK tab.

Now it shows multiple addresses, those are our wallet different Private keys, Those we can export to our system on clicking the Export tab.

Now my private key Export to my system successfully.

Like that we can Export our Private keys, very easily using our wallet Password.

Perform a real transaction(Send BTC) to another Address using 2 of 3 Multisig wallets?

For performing this Task first I create one standard wallet in Electrum, because giving a Multisign wallet address as a withdrawal address in Exchanges is not allowing, so first I create one standard account in Electrum.

Now I Withdraw my BTC from Exchange to Electrum standard wallet.

For this, I just copy the Electrum Standard Wallet receiver address.

_{Coping Electrum Standard Wallet receiver address.}

Now I go to my Binance Exchange, Then withdraw $50 worth BTC, here I pay 20$ as a Gas fee, it's huge but for getting Experience I continue my Further step.

_{Withdraw BTC from Binance to Electrum Standard Wallet}

Now I successfully receive my BTC to My wallet.

_{Received My BTC in Electrum Standard Wallet}

Now I withdraw this BTC to my Multi sig Electrum wallet, so on opening My Multisig wallet, I copy my receiver address.

_{Coping Electrum Multisig Wallet receiver address}

After copying the address, Again I came to my standard wallet, then select the Send tab.

Now we get this screen. On filling in all details click the Pay tab.

_{Withdraw BTC from Standard to Multisig wallet}

Within a few minutes, it was added to my Multisig wallet.

_{My Balance In My Multisig Wallet}

Now for sending my BTC to other wallets, I just select the SEND tab.

Now you get this screen,Here enter recipient address, description,amount then click Pay tab.

Here I withdrawing my BTC from Multisig wallet to My Binance Exchange Wallet, so here I give my Binance BTC address as the recipient address.

Now we get this screen. Here we need to adjust Network Fee, Then give your wallet password, then click the Send tab.

Now you get this screen. Here it clearly shows our send Transaction is not yet finished. Because it is a Multisig Wallet, for approval it needs another cosigner sign for successful withdrawal.

So here we need to Export our Transaction file to our cosigner, then after his approval, it gets success. For the Export Transaction file select the Export tab, it is visible left side bottom of the screen.

Now I successfully Export My file to my device.Here I export that Transaction in File Format.We can also Export other Formates like QR CODE and Many other Formates also.You can check that file on my desktop also.

Now our work finish, For successful Withdrawl one of our cosigner open this file in their wallet, then need to sign it. Then only it gets successful.

Now all activities doing my ourself, so I open one of my cosigner wallets.

Then go to Tool tab, then select Load Transaction,then select From File.

Now you need to select that Incomplete Transaction file in our device. After selecting just click on the Open tab

Now you get this screen, Here select the Sign tab.

Now it asks password for approve Transaction. Just on giving password, select OK tab.

Now within a few seconds, our withdrawal Transaction is executed. We get this Notification on our Device.

_{My Successful Withdrawal Confirmation}

But it takes time to succeed as per Blockchain Traffic. You can also check details in our wallet and as well as in Blockchain Explorer.

_{My Unconfirmed Transaction In My Wallet}

_{My Unconfirmed Transaction In Blockchain Explorer}

In a few minutes, I get my BTC in My Binance Exchange Wallet.

_{Succefully I Got My BTC in My Exchange Wallet}

Like that in Multisig Wallets, we need to Withdrawal our funds on using Two Signs in 2 of 3 Multisig wallets.

Before Withdrawal I having 0.6968BTC in my wallet, so here I withdrawal 0.6BTC, for this I pay 0.0058 as Transaction feel, so the remaining 0.091BTC was again added to my Multisig wallet on creating a new Change Address for me.

Here this process is Automatically Done, so no need to do anything for us. This all calculations System will handle it. Then the other remaining balance is again added to our wallet automatically.

_{My Leftover Balance Added to My Change Address}

After finishing the Transaction, the remaining balance is added to our Multisig wallet successfully.

_{My Remaing Balance In My Wallet}

Like that each leftover penny is again sent back to our wallet on creating another change address for our needs.

What is the difference between Receiving Address & Change Address? Demonstrate your experience with a Change Address?

Receiving address and Change Address we can see on checking Addresses tab in our wallet.

Here Receiving address means our wallet address, which we use for Deposit BTC from Exchanges. On giving this Address we can Withdraw BTC from Other Exchanges to Our Multisig Wallets.

Coming to Change Address it was created by our Multisig wallet to store our leftover BTC again to our wallet in our Transactions. This amount is again added to our wallet through this address, and we can use this BTC for further needs.

In the above example we can see after sending 0.6BTC, my remaining Balance of 0.091BTC was added to my wallet through Change Address.

Like that receiving address and change address automatically generate as per needs. So we have nothing to do here, the system will handle it.

Conclusion:-

• Multisig wallets are also one type of Decentralized wallet, so for opening an account no need for any Emails, Phone numbers. We can create an account here very quickly and easily at free of cost.

• This wallet also recover using Seed, we need to store this phrase very safely.

• Here we get an extra layer of security due to the Multi-signature needed for every Transition. So hackers not possible to hack like normal single wallets.

• Here we can send our BTC to other wallets with very fewer fees as compared to Exchanges.

• For Organisations and Joint Investment users can use this wallet for getting security and Trustworthy Purposes.

This is a very new experience for me. Don't use it before, now I learn new concepts in the Crypto field. Thanks for giving like a good opportunity.

Thanks For Reading My Post