Summary
TLDR: Multisig is a secure method for storing bitcoin that eliminates risks associated with custodians and exchanges. Self-custody is important to protect your private keys and ultimately, your bitcoin. Singlesig involves one private key, while multisig requires multiple keys for added security. Multisig offers increased protection against theft and loss, with customizable quorums like 2-of-3 being popular. Multisig has applications for groups and can be used for bitcoin-backed loans. While multisig is more complex and can have higher transaction fees, it offers enhanced security benefits. You can set up multisig yourself using open-source programs or opt for collaborative custody with a trusted partner like Unchained Capital for added support.
Key Points
1. Multisignature (multisig) is widely recognized as one of the most secure methods for storing bitcoin, eliminating risks associated with exchanges and custodians, and addressing common issues with self-custody.
2. Holding your own bitcoin keys is essential as it gives you full control over your funds. Avoiding custodial solutions ensures that you truly own your bitcoin and are not just holding an IOU from an exchange.
3. Multisig wallets offer increased security by requiring multiple private keys to authorize transactions, reducing the risk of theft or loss compared to singlesig wallets. Additionally, multisig can be used for collaborative custody arrangements, providing expert assistance while still maintaining full control over your funds.