Multi-Sig wallets require more than one signature - typically from different private keys - to authorise a Bitcoin transaction. . Users can set up their Multi-Sig wallet to require, for instance, three out of five signatures to authorise a transaction, often denoted as a 3-of-5 wallet.
Multi-Sig technology augments the security framework of cryptocurrency dealings. By demanding more than one signature, it fosters a system of checks and balances, making it a potentially suitable choice for shared funds or organisational asset management. Moreover, it can act as a self-imposed safeguard against impulsive transactions.
They are sometimes preferred by business partnerships where joint approval is necessary for fund access. Furthermore, they can serve as a robust security mechanism for individual users, providing an additional layer of security against hacking attempts.