Cryptocurrencies is one of the biggest known term now a day
and is all set to gain more in future. One of the very amusing feature is smart
contract which is basically programmable money. Smart contracts are the
automated transactions which are based on certain conditions. Multi-signature
action or shared wallet is the application of smart contract.
How shared Bitcoin wallet(Multisig) works
The bitcoin shared wallet application allows users to store
both Bitcoin cash(BCH) and Bitcoin core(BTC) and the ability to create shared
wallet. Creating a shared wallet is not that touch and gives the advantage of
extra security. These shared wallets are also called as multisig(multisignature)
wallets.
Multi-signature wallets are close to joint accounts in
traditional banking system and is accessible by two or more users. Every transaction
in Bitcoin shared wallet must be authorized by all the authoritative holders. Before
you spend any coin, it must be approved by co-signer. If the requirement to
create a community or trust managed fund these wallets are the perfect
solution.
Why use multisig wallet
Shared wallets are the ordinary wallets with not so ordinary
features. Using shared wallets has its own advantages and few of them is here:
- Security:
Shared wallets secures all your transactions either for single user multiple devices
or shared accounts. A single user can also secure all the transactions of the
wallet by creating a shred wallet. If in case due to any reason you lose your
smart phone you need not to worry about the transactions. Reason being the
thief would not be able to execute any transaction as it requires permissions
from co-signers. This automatically increases the security for you.
Account history: It plays an important role in
management of shared account history. When the account is jointly owned all the
co-owners has access to the history and passbook of shared wallet which helps
in accounting management.
Consent of all co-owners: As the wallet belongs
to group of people any transaction or action seeks opinion of all the parties. Since
the transaction cannot be authorized without the required authorization from
the co-owners it promotes mutual consent from all within app.
3rd party Escrow or mediation: In the
cases where you want to buy something online or make any bet.
How to create shared wallets
Download and install Bitcoin.com wallet app. The
application is available for iOS, Linux, windows, android.
Navigate to home screen and click on “+” icon to
create your wallet.
Select create shared wallet from “add wallet”.
There comes the account set up. Choose your wallet
name, your name, Number of co-payers, total number of signature required etc.
The number of co-payers is all the users
who has access to this shared wallet and the number of signature required is
the minimum number of signature required to complete a transaction with
consent.
Once you will click on create a wallet you need
to share the invite code with all the co-payers to join the wallet. You can
scan the code or copy the text of block and share among all.
You must be thinking that wallet
is shared so where is the individual security however it is secured at
individual level. Each co-signer will have their own private key which will
grant them access to their own wallet.
Note: -
Always keep the number of required signatories
less than number of co-signers so that of any of the co-signer loses the device
you can still execute the transaction.
Always keep backup of your shared wallet and it
is advised to all the participants of shared wallet.
