Multisig basics

Multisignature ("multisig") locks coins so that spending requires m of n designated keys (e.g., 2-of-3). It is native Bitcoin script (OP_CHECKMULTISIG, or key/script aggregation under Taproot), enforced by consensus — not a wallet-app feature. P2SH (BIP-16, activated 2012) made it practical by letting the spending conditions hide behind a hash until spend time. Multisig removes single points of failure in both directions: no single stolen key can spend (theft resistance) and, with m < n, no single lost key strands the funds (loss resistance).

Nuance: The costs are operational: multiple keys and their backups must be stored separately, the wallet descriptor/redeem information must itself be backed up (knowing your own key is not enough to reconstruct a multisig wallet), and inheritance/recovery procedures get more complex. Collaborative-custody services put a cosigner key with a company while leaving the user quorum control — a middle point between self-custody and custodial, worth naming precisely.

Common misstatements:

• "Multisig means the company holds your bitcoin." — In m-of-n setups where the user holds ≥ m keys' worth of quorum power, no third party can spend or block competently configured funds.
• "2FA on an exchange account is multisig." — Exchange 2FA gates an account login; multisig is on-chain script enforced by every node.
• "Multisig only protects against theft." — With m < n it equally protects against key loss, often the larger real-world risk.