How it works
Multi-sig Wallets 101
When you wish to send funds from your wallet, a transaction is created and signed. By signing the transaction, you are digitally saying:
“I am the owner of the funds, I have the key to manage them, and I approve this transaction.”
Single signature (also known as “basic”) cryptocurrency wallets need one signature to sign a transaction. Multi-sig is the shortened name for multi-signature, and, as the name indicates, this kind of wallet requires one or more signatures to sign a transaction.
A multi-sig wallet is usually shared by two or more users Co-payers. Depending on the kind of wallet, the number of signatures required to sign a transaction will be lower or equal to the number of co-payers of the wallet.
For example, a 3–3 wallet is a multi-sig wallet that is shared by three people and requires three signatures to sign a transaction. A 2–3 wallet is a multi-sig wallet that is shared by three people and requires two signatures to sign a transaction. You may also see “2 of 3” to indicate the number of co-payers needed.
To move funds, every wallet requires the user broadcasting the payment to sign the transaction. Multi-sig wallets also require one or more co-payers to sign the transaction.
Example A: with a 2–2 wallet Co-payer A wants to send funds. When they try to move funds, the wallet creates a transaction proposal that is only signed by Co-payer A. Sending the funds requires both Co-payer A and Co-payer B to sign the transaction. Until Co-payer B approves the transaction, the funds stay in the wallet. Once Co-payer B approves the proposal, their wallet signs the transaction, broadcasts it to the network and sends the funds.
Example B: a 2–3 wallet requires two (out of three total) co-payers to sign a transaction. Co-payer A creates the transaction proposal. Either of the remaining co-payers (Co-payer B or Co-payer C) can approve the transaction proposal.
A 2–3 wallet has three co-payers but requires only two signatures.
THORSafe Multi-Sig transaction proposals do not expire — there is no time limit to approve a transaction proposal. There is no co-payer hierarchy. This means that any co-payer can create a transaction proposal, and all the co-payers can sign the transaction proposal.