Multisignature is a special payment authentication tool when collective confirmation of a transaction is required.

Any financial system assumes the need to confirm transactions that are carried out online. Moreover, such a function exists in cryptocurrency, where coins have an exclusively digital expression without alternative options. One of the common verification methods is Multisignature.

Features of verification of payments in cryptocurrency

Any transaction in any cryptocurrency system is carried out according to a specific algorithm:

• the user creates a transaction;
• miners must review and approve it;
• the transfer of money must be confirmed by special keys, depending on the terms of the transaction; this can be only a private key or a combination of public and private keys.

Multisignature differs from such a scheme in that its confirmation will be performed only after several private keys have approved the transaction. As a rule, they belong to several money owners in a kind of cryptocurrency safe.

History of the development of Multisignature technology

In fact, this method is not unique to cryptocurrency. The same strategy has been used since ancient times, when physical keys, for example, to a tomb, were given to several monks. Alone, none of them had the opportunity to gain access to the relics; the entrance was opened only if all the keys were present.

Multisignature works on the same principle. It was first introduced into the Bitcoin system in 2012. And since 2013, crypto wallets have appeared that began to support this option.

Problems that Multisignature solves

The main goals for which Multisignature technology was introduced are:

• increasing the level of transaction security;
• division of responsibility.

The second point means that to complete a transaction, a collective decision on the transfer of money must be approved. This decision is fixed precisely by a set of unique private keys. This phenomenon is rational in the case of several company owners who make payments for substantial amounts. Moreover, they can be in different parts of the world when making a transaction.

To increase security, it is provided that private keys from Multisignature are stored on different types of devices (smartphones, PCs). Due to this, the theft of funds is effectively prevented since it is much more difficult for scammers to access several devices simultaneously.

The practicality of using Multisignature is also noted when conducting trade transactions in which the level of trust in each transaction participant is low. Typically, a separate deposit account is created in this case, and confirmation of the transfer of funds must also be received from a third, uninterested person.