With companies increasingly becoming invovled in cryptocurrency, there are concerns about security. For individual users, cryptocurrency wallets are owned by a single person, which is not ideal for corporations: no individual in a company should have authority over all the funds.
A MultiSig wallet has an additional security measure for cryptocurrency transactions. Rather than a single wallet signature requirement for transactions, it requires the signature of multiple people before it is executed.
The exact number can be determined in the M — N transaction format. M indicates the number of signatures are required, while N refers to the total number of users in the wallet.
John and his wife, Mary, set up a Mist MultiSig Wallet, and configure it to be a 1–2 account. Any transaction only requires the signature of either of their accounts for it to be verified.
John and his 2 business partners also set up a Mist MultiSig Wallet. For transfers above 5,000 USD, it is configured to a 2–3 account, where at least 2 signatures are required for a transaction to be approved.
How To Set Up A Mist MultiSig Wallet
Do note that a Mist wallet takes up significant amount of space on the computer, as it loads the blockchain onto your device. Do have sufficient space before beginning.
Download an Ethereum Mist Wallet.
Be sure to download the latest stable version to keep up to date with their latest security measures and protocols. Find the installer that runs on your OS (Windows, Mac, Linux), and proceed to download it.
Launch the wallet and install it, which will bring you to this page. Select “Use the Main Network”.
If you have had a previous wallet, you will be prompted to ‘Drop Wallet File’ to sync it.
If you do not have a Mist wallet to integrate, just press skip.
It will then prompt you to set up a password.
The password should be strong and secure, as it cannot be changed. Do remember the password at all costs, and record it safely offline.
Once a password has been chosen, they will prompt you to create a backup of your keyfiles and password.
It is important to keep these safely, as they are the only means of accessing any funds you have inside.
Once that has been done, Mist Wallet will prompt you to load up with currency. If you have any Ether that you wish to place inside, you would be able to do so here. It also accepts other cryptocurrency as payment, and these will be Shapeshifted to Ether.
Now, it takes some time for the blockchain to be loaded onto your hardware, so be patient. Keep an eye out, in case the connection is disrupted or the download is paused.
Opening Mist Wallet
When the wallet is done loading, click on it to open.
The Ethereum Wallet will also prompt you to ‘Launch Application’ when it is done.
Once the wallet has loaded, it will display the main page, which shows the account that you have. However, to create a Multi Signature Account, there needs to be more than one account added.
Simply tap on ‘Add Account’ to do so. You may import in a JSON file for existing Ether Wallets to connect.
Make A Multi Signature Wallet
Once the accounts have been added, tap on ‘Wallet Contract’ to open a MultiSignature Wallet Contract. In this section, you can add the number of owners in total, the total limit of Ether per day that can be transacted, and the number of signatures required for larger transactions. For example, the wallet could have 5 partners, and any transaction above 10 ETH could require the approval of 3 or more owners.
With that, companies are able to ensure that no single individual is able to siphon off funds, and this brings peace of mind to both investors and the head of the company.