<p>Enjoy!</p>

<p>"Bitcoin Faucet Hacked"
How a future version of the Faucet will work to prevent a similar incident:</p>

<ul>
<li><a href="http://gavintech.blogspot.com/2012/03/bitcoin-faucet-hacked.html">http://gavintech.blogspot.com/2012/03/bitcoin-faucet-hacked.html</a></li>
</ul>

<p>"BIP 16 / 17 in layman's terms"</p>

<ul>
<li><a href="http://bitcointalk.org/index.php?topic=61125.0">http://bitcointalk.org/index.php?topic=61125.0</a></li>
</ul>

<p>"The Truth behind BIP 16 and 17"</p>

<ul>
<li><a href="http://bitcoinmedia.com/the-truth-behind-bip-16-and-17/">http://bitcoinmedia.com/the-truth-behind-bip-16-and-17/</a></li>
</ul>

CC BY-SA 3.0
2012-05-18T00:14:50.597Z
2012-05-18T00:14:50.597Z
Stephen Gornick
<p>Multisig have lots of uses, wallet sharing, increased security and escrow to say the first that come to mind.</p>

<p>Increased security: 2FA purposes or even help provide services like double spend prevention and instant confirmation.</p>

<p>If you want to try an open source wallet with all these features in action try <a href="https://greenaddress.it" rel="nofollow">https://greenaddress.it</a></p>

<p>It allows you to smoothly create P2SH Multisig transaction but with a simple intuitive interface that hides all the complexity.</p>

CC BY-SA 3.0
2014-03-27T22:48:04.617Z
2014-03-27T22:48:04.617Z
Lawrence Nahum
<p><strong>An example applying a Multi-Signature transaction in the hospitality industry!</strong></p>

<p>The transactions of this form demand the assumption that from N public keys which remain stored in the Locking Script, at least M (N≥M) from these must create valid signatures, which are found on Unlocking Script, in order the amount of bitcoins to be transferred to the wallet and the bitcoins to be spendable afterwards.</p>

<p>This procedure of authentication essentially is happening for keeping the funds secure which are stored in a Multi-Signature address of a digital wallet and not to be feasible to be spent by anyone who has access to the wallet. This procedure depends on the scheme M-of-N. Therefore, in order someone who wants to create a Bitcoin Multi-Signature address needs the combination of several private keys. This specification is visible also in the morphology of this kind of addresses as these addresses are not starting with the number 1 as usual, but with number 3. <strong>Let’s see an example for clarification</strong>.</p>

<p>Imagine that the last class of a high school in Thessaloniki (Greece) wants to travel for educational purposes for one week (6 nights) to Barcelona (Spain). The school is going to stay in the “Hotel X ”. The hotel accepts bitcoin payments and has a policy that for charges above 5000 euros ≈ 9,29 BTC (26/9/92016) the funds must be stored in a Multi-Signature address owned by the hotel. The school is going to pay for the reservation 10,800 euro≈ 20,06 BTC in total (60 students * 6 nights * 30 euros/night). So, the wallet of the school has to form a Multi-Signature transaction in order to pay.</p>

<p>The administration of the hotel has decided  that in order the hotel to take advantage of the funds above 5000 euros the transaction must be signed at least by 2 out of 3 signatures of the below authorized recipients :</p>

<p>•   Mary (Financial Controller)</p>

<p>•   Pedro (IT Administrator)</p>

<p>•   Adriano (CFO)</p>

<p>So, the scripts of this special transaction will look like:</p>

<p>•   Locking Script
<a href="https://i.sstatic.net/mRDZb.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/mRDZb.png" alt="enter image description here"></a></p>

<p><em>Scheme 1: Locking Script of a Multi-Signature Transaction</em></p>

<p>•   Unlocking Script</p>

<p><a href="https://i.sstatic.net/Gcptn.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/Gcptn.png" alt="enter image description here"></a></p>

<p><em>Scheme 2: Unlocking Script of a Multi-Signature Transaction</em></p>

<p>•   Validation Script</p>

<p><a href="https://i.sstatic.net/RWWYF.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/RWWYF.png" alt="enter image description here"></a></p>

<p><em>Scheme 3: Validation Script of a Multi-Signature Transaction</em></p>

<p>Finally, in our example Pedro and Adriano have to sign with their private keys in order the hotel to be able to spend in the future the amount of bitcoins stored in this transaction.</p>

<p><strong>*All the names used incidentally for the purpose of the example.</strong></p>

CC BY-SA 3.0
2016-09-28T08:40:05.800Z
2016-09-28T08:40:05.800Z
gtopal
<p>A multi-signature <strong>address</strong> is an address that is associated with more than one ECDSA private key. The simplest type is an m-of-n address - it is associated with n private keys, and sending bitcoins from this address requires signatures from at least m keys. A multi-signature <strong>transaction</strong> is one that sends funds from a multi-signature address.</p>

<p>The primary use case is to greatly increase the difficulty of stealing the coins. With a 2-of-2 address, you can keep the two keys on separate machines, and then theft will require compromising both, which is very difficult - especially if the machines are as different as possible (e.g., one pc and one dedicated device, or two hosted machines with a different host and OS).</p>

<p>It can also be used for redundancy to protect against loss - with a 2-of-3 address, not only does theft require obtaining 2 different keys, but you can still use the coins if you forget any single key. This allows for more flexible options than just backups.</p>

<p>It can also be used for more advanced scenarios such as an address shared by multiple people, where a majority vote is required to use the funds.</p>

<p>Multi-signature transactions are often conflated with BIP 16 and 17. In fact they are not directly related. Multi-signature transactions have been supported by the protocol for a long time; but implementing them would require a special output script.</p>

<p>What BIP 16/17 do is offer a standard way to encapsulate a script within an address; this makes it easier to use advanced scripts, with the most prominent example being multi-signature transactions.</p>

CC BY-SA 3.0
2014-03-19T13:08:49.300Z
So as of now multisignatures are not supported and non-standard.
Jus12
CC BY-SA 3.0
2014-03-19T17:06:22.373Z
@Jus12: They're supported (Bitcoin Core raw transaction API) and AFAIK standard.
Meni Rosenfeld
CC BY-SA 3.0
2014-07-01T19:55:34.113Z
Multisig transactions are indeed standard, you can see several of them being created on the blockchain. To build one easily see: http://dev.blockcypher.com/#multisig
Matthieu
CC BY-SA 3.0
2015-01-05T02:36:48.660Z
I believe Bitcoin Core only supports up to 3 players and that threshold signatures would circumvent this limitation. Am I right?
Janus Troelsen
CC BY-SA 3.0
2016-12-23T19:47:00.733Z
Janus: up to 15 now.
Pieter Wuille
CC BY-SA 3.0
2012-05-18T20:37:31.170Z
And for the parts that are missing yet: 
Needed in the client yet are "RPC calls to implement BIP 10 or something like it"

 - http://bitcointalk.org/index.php?topic=82213.msg906833#msg906833
 - http://en.bitcoin.it/wiki/BIP_0010
Stephen Gornick
CC BY-SA 3.0
2012-05-18T08:16:42.143Z
2015-01-05T19:20:28.713Z
2015-01-05T19:20:28.713Z
Meni Rosenfeld
<p>What are multi-signature transactions, and why might they be used?</p>

<p>Also see:</p>

<ul>
<li><a href="https://bitcoin.stackexchange.com/questions/3557/how-does-one-make-multisignature-transactions-with-the-bitcoin-client">How does one make multisignature transactions with the bitcoin client?</a></li>
<li><a href="https://bitcoin.stackexchange.com/q/3712/516">How can I create a multi signature 2-of-3 transaction?</a></li>
</ul>

<transactions><multi-signature>
What are multi-signature transactions?
Highly Irregular
# What are multi-signature transactions?

(Asked by: username_0 on 2012-05-17)

What are multi-signature transactions, and why might they be used?

Also see:

* [How does one make multisignature transactions with the bitcoin client?](https://bitcoin.stackexchange.com/questions/3557/how-does-one-make-multisignature-transactions-with-the-bitcoin-client)
* [How can I create a multi signature 2-of-3 transaction?](https://bitcoin.stackexchange.com/q/3712/516)

**Tags:** transactions, multi-signature


---

## 4 answers

### Answer by username_4 on 2012-05-18. Score: 46 | Accepted answer

A multi-signature **address** is an address that is associated with more than one ECDSA private key. The simplest type is an m-of-n address - it is associated with n private keys, and sending bitcoins from this address requires signatures from at least m keys. A multi-signature **transaction** is one that sends funds from a multi-signature address.

The primary use case is to greatly increase the difficulty of stealing the coins. With a 2-of-2 address, you can keep the two keys on separate machines, and then theft will require compromising both, which is very difficult - especially if the machines are as different as possible (e.g., one pc and one dedicated device, or two hosted machines with a different host and OS).

It can also be used for redundancy to protect against loss - with a 2-of-3 address, not only does theft require obtaining 2 different keys, but you can still use the coins if you forget any single key. This allows for more flexible options than just backups.

It can also be used for more advanced scenarios such as an address shared by multiple people, where a majority vote is required to use the funds.

Multi-signature transactions are often conflated with BIP 16 and 17. In fact they are not directly related. Multi-signature transactions have been supported by the protocol for a long time; but implementing them would require a special output script.

What BIP 16/17 do is offer a standard way to encapsulate a script within an address; this makes it easier to use advanced scripts, with the most prominent example being multi-signature transactions.

> **Comments:**
> **username_1**: And for the parts that are missing yet:  Needed in the client yet are "RPC calls to implement BIP 10 or something like it"   - http://bitcointalk.org/index.php?topic=82213.msg906833#msg906833  - http://en.bitcoin.it/wiki/BIP_0010  
> **username_5**: So as of now multisignatures are not supported and non-standard.  
> **username_4**: @username_5: They're supported (Bitcoin Core raw transaction API) and AFAIK standard.  
> **username_6**: Multisig transactions are indeed standard, you can see several of them being created on the blockchain. To build one easily see: http://dev.blockcypher.com/#multisig  
> **username_7**: I believe Bitcoin Core only supports up to 3 players and that threshold signatures would circumvent this limitation. Am I right?  
> **username_8**: username_7: up to 15 now.  

---

### Answer by username_1 on 2012-05-18. Score: 7

Enjoy!

"Bitcoin Faucet Hacked"
How a future version of the Faucet will work to prevent a similar incident:

* <http://gavintech.blogspot.com/2012/03/bitcoin-faucet-hacked.html>

"BIP 16 / 17 in layman's terms"

* <http://bitcointalk.org/index.php?topic=61125.0>

"The Truth behind BIP 16 and 17"

* <http://bitcoinmedia.com/the-truth-behind-bip-16-and-17/>


---

### Answer by username_2 on 2014-03-27. Score: 3

Multisig have lots of uses, wallet sharing, increased security and escrow to say the first that come to mind.

Increased security: 2FA purposes or even help provide services like double spend prevention and instant confirmation.

If you want to try an open source wallet with all these features in action try <https://greenaddress.it>

It allows you to smoothly create P2SH Multisig transaction but with a simple intuitive interface that hides all the complexity.


---

### Answer by username_3 on 2016-09-28. Score: 1

**An example applying a Multi-Signature transaction in the hospitality industry!**

The transactions of this form demand the assumption that from N public keys which remain stored in the Locking Script, at least M (N≥M) from these must create valid signatures, which are found on Unlocking Script, in order the amount of bitcoins to be transferred to the wallet and the bitcoins to be spendable afterwards.

This procedure of authentication essentially is happening for keeping the funds secure which are stored in a Multi-Signature address of a digital wallet and not to be feasible to be spent by anyone who has access to the wallet. This procedure depends on the scheme M-of-N. Therefore, in order someone who wants to create a Bitcoin Multi-Signature address needs the combination of several private keys. This specification is visible also in the morphology of this kind of addresses as these addresses are not starting with the number 1 as usual, but with number 3. **Let’s see an example for clarification**.

Imagine that the last class of a high school in Thessaloniki (Greece) wants to travel for educational purposes for one week (6 nights) to Barcelona (Spain). The school is going to stay in the “Hotel X ”. The hotel accepts bitcoin payments and has a policy that for charges above 5000 euros ≈ 9,29 BTC (26/9/92016) the funds must be stored in a Multi-Signature address owned by the hotel. The school is going to pay for the reservation 10,800 euro≈ 20,06 BTC in total (60 students \* 6 nights \* 30 euros/night). So, the wallet of the school has to form a Multi-Signature transaction in order to pay.

The administration of the hotel has decided that in order the hotel to take advantage of the funds above 5000 euros the transaction must be signed at least by 2 out of 3 signatures of the below authorized recipients :

• Mary (Financial Controller)

• Pedro (IT Administrator)

• Adriano (CFO)

So, the scripts of this special transaction will look like:

• Locking Script
[![enter image description here](https://i.sstatic.net/mRDZb.png)](https://i.sstatic.net/mRDZb.png)

*Scheme 1: Locking Script of a Multi-Signature Transaction*

• Unlocking Script

[![enter image description here](https://i.sstatic.net/Gcptn.png)](https://i.sstatic.net/Gcptn.png)

*Scheme 2: Unlocking Script of a Multi-Signature Transaction*

• Validation Script

[![enter image description here](https://i.sstatic.net/RWWYF.png)](https://i.sstatic.net/RWWYF.png)

*Scheme 3: Validation Script of a Multi-Signature Transaction*

Finally, in our example Pedro and Adriano have to sign with their private keys in order the hotel to be able to spend in the future the amount of bitcoins stored in this transaction.

**\*All the names used incidentally for the purpose of the example.**


---

