Multi-sig, or multi-signature, is the requirement for two or more signatures on a transaction before it can be completed. Multi-sig is used in the Bitcoin and comparable electronic cryptocurrencies to boost security. A classic multi-sig would be set up as ‘M-of-N’, with M denoting the needed number of signatures or keys and N being the total number of keys involved. For example, a 2-of-3 multi-sig setup would require two signatures from a group of three keys that are responsible for the wallet.
Multi-sig is similar in paper-based financial transactions and contractual agreements that require more than one signature, such as corporate checks that require two or more signatures, which have been around for decades. It has tremendous potential for decentralized escrow services and other financial constructs.