Multisig
Multisignature · m-of-n wallet
A multisig wallet requires signatures from a set number of several different keys, for example any 2 of 3, before its coins can be moved.
Each key is held separately, ideally on different devices and in different places. One lost key does not lose the coins, and one stolen key cannot move them.
The cost is complexity. Besides each key’s backup, the wallet configuration, meaning every extended public key and the signing policy, must be preserved; BIP380 output descriptors write it as one line. Without it, the keys alone may not be enough to rebuild the wallet.
Co-signers pass transactions to each other in the PSBT format until enough signatures are collected. Multisig is common in inheritance plans.
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