Multisig (multi-signature)

A multisig wallet requires signatures from several keys to approve a transaction, described as "m-of-n". For example, a 2-of-3 setup has three keys, and any two of them can move the funds.

Multisig removes the single point of failure of a one-key wallet. If one key is lost, the remaining two can still recover the funds. If one key is stolen, the thief cannot spend alone. Businesses use it so that no single employee can move treasury funds, and families use it to spread keys across locations or trusted people.

The cost is complexity. You must back up every key and the wallet's configuration, sometimes called the descriptor, which records which keys form the wallet. Without it, recovery can be hard. On Ethereum, multisig is implemented with smart-contract wallets rather than native script.