Multisig (multi-signature) is a wallet setup in which several private keys are needed to approve a transaction. It is described as "m of n": for example 2-of-3 means there are three keys and a transaction needs two signatures. An ordinary wallet has one key, and whoever gets it gets the money.
Where multisig is used
- Exchanges and casinos often keep most of their funds in cold wallets that need the signatures of several employees or devices to move. This reduces the risk that one hacked server or one dishonest employee empties the till. Whether a particular casino does this is its own claim, which a player usually cannot check.
- Individuals use multisig to hold larger amounts: for example one key in a hardware wallet at home, another in a different place and a third as a backup.
Pros and cons for a player
- Pro: losing or having one key or one seed phrase stolen does not mean losing the money.
- Con: the setup is more complicated and transactions are slower. For everyday casino play it is too cumbersome.
- Con: if you lose too many keys (two in a 2-of-3), the money is locked for good.
Multisig and a casino balance
Money sent to a casino cashier is no longer in your multisig wallet. A casino balance is the casino's promise, not your key. Multisig protects the money you are not playing with — for example winnings withdrawn from the casino. A sensible setup has two parts: a small hot wallet for play and a well-protected store, which may be multisig, for everything else.
How to start
Multisig is supported by several non-custodial wallets and hardware wallets. Before sending a larger amount, make a test transaction and also test recovery: make sure you can get the money out if one device is lost. Background: Wikipedia: multisignature. A comparison of wallets: a crypto wallet for the casino.