Interesting article on what multisig can do.
- Thread starter mattseh
- Start date
Multisig is definitely a step in the right direction, but it's not perfect, and comes with its own set of problems. Injection of public keys, sites closing their doors essentially locking client funds, etc... Definitely a million times better than the old all-in-one wallet.dat implementation though, but it still has some kinks, which I'm sure will be worked out as time unfolds.
Couldn't funds be secured using multiple third parties, so if a few die, funds can still be unlocked?
Yep, definitely. If I recall correctly, the limit is 15 signatures per-transaction. Anything above that is considered non-standard, and won't be accepted by most miners, hence will take forever to confirm.
Again though, this comes with its own set of problem, two mainly.
1.) The people authorized to sign outgoing transactions are set in stone during address generation. If you generate say a 3 of 5 multsig address, have $10k sent to it, then 6 months later decide to pull that money out, only those 5 people you initially designated can sign. It's impossible to change who the authorized signers are, hence leading to the potential of loss funds if you use multisig improperly.
2.) Change can't be spent immediately. Not sure how much you know about bitcoin, but transactions are just a series of inputs / outputs, and every output must spend 100% of its input. You can't spend a partial input. For example, if you have 5 BTC come in from one payment, and want to spend 2 BTC of that, you have to send all 5 BTC in the transaction, and send 3 BTC of it back to yourself (change address). With a multisig that requires multiple people to sign at different times, that 3 BTC in change is locked, and can not be spent until the initial transaction is fully signed & broadcast to the blockchain.
Don't get me wrong, multisig is great. I have my own wallet software that I'm just getting ready to launch, and it even contains that friends list feature you implied. Feel free to login with the demo account, Accounts->Security menu, Friends tab. Define your friends, then upon creating a new account via Financial->My Accounts menu, you can define the # of friends that must sign the transaction. Any funds that go into that account can't get sent out unless X friends sign it with their own private keys.
Again though, the multisig wallets that are getting touted aren't perfect, but definitely a step in the right direction, and we are getting there. There's still more work to be done though.
Kiopa, I think what seh meant by 'multiple 3rd parties' is that if you're the one who generates your multiple keys for a wallet, you can send a single one of those multiple keys to multiple 3rd parties... That way if Bitgo goes offline and can't validate your 2-3 transaction, then you switch your provider to bitpay and their duplicate of the same key Bitgo had can validate it for you.
Multisig solves everything security-wise... It's just too complicated for most people to wrap their heads around.
Are you still unaware that it works better than anything else?
Multisig solves everything security-wise... It's just too complicated for most people to wrap their heads around.
Lol.
Are you still unaware that it works better than anything else?
You seriously asking bro? I'll be happy to lay it out for you if you're finally curious...
If multiple entities have the same key, you won't have any way to know who signed it.
Who cares who signed it? You have the other two. Just as long as someone signs that transaction when you need it signed, you get what you need.
You can give that one private key to 1,000 different people, and as long as you have the other two, everything will go smoothly and no one steals your coins.