Multisig

Can someone explain to me what this is exaclty? it's an option on some of the sights but i just don't know what it is or how to use it so i've just been using the standard escrow.


Comments


[2 Points] RosyPalm:

Basically it means all transactions have three parties and in order for anything to happen with the BTC's two of the parties have to agree. The main idea is keep the DNM from being able to unilaterally move BTC's while providing a means to complete transactions in the event a DNM ceases operations.


[2 Points] Panacea_Community:

It is basically the following:


Panacea - Flower Sanctuary


SITE: panaceaz4give75l.onion


REDDIT: /r/Panacea


[2 Points] andyandroscam:

centralized escrow is what your used to. It involves: buyer sending btc to market escrow for safekeeping. When buyer is pleased with order, they finalize and market admin releases escrow to vendor. If buyer is not pleased, the market admin has to make a resolution decision as to what happens with the escrow funds usually being: Full vendor payment Partial vendor payment / partial buyer refund Full buyer refund

With centralized escrow, you have risks which neither buyer nor vendor can do anything about: market admin decides to pull an exit/retirement scam and can simply transfer all the escrow funds currently under their control for all open orders to their personal wallet and retire. LE seizes site and gains control of escrow funds and seizes all the btc. Hacker gains control of all or part of escrow funds and steals some or all btc in escrow.

Multisig escrow is supposed to remove some of the risks. Not perfect but certainly better than centralized esrow as far as reducing those particular risks.

Process works like this: Buyer creates a multisig wallet address which will hold the escrowed btc (wallet address usually starts with #3) Buyer creates a signing wallet with public key and a private key (standard wallet address starting with #1) Buyer assigns their signing wallet address public key to the multisig wallet. They hold onto their private key to later initiate the finalize signoff. Buyer places order and sends btc to the multisig wallet address where they sit til finalize. Vendor then repeats step #2 with a different signing wallet (and they hold the privatekey til later) Market does same. So now you have: Multisig wallet with the btc 3 signing wallets associated with the multisig wallet Any 2 out of the 3 signing wallets can cause the btc to be paid to another wallet at any time. Buyer is pleased with order, so they signoff using their signing address private key. Vendor then signs off and they can instruct payment to a personal wallet. If buyer is not pleased, market admin has a signing key so they can resolve in cinjunction with buyer or vendor to execute the resolution payments.

So this helps protect against certain risks: Market admin cant sign off all by themselves and just steal btc. Theyd need a much more involved scam involving posing as buyers and sellers or some other trickery to steal and its unlikely it could ever be as big as central escrow theft. LE seizure - little harder but at minimum, LE has nothing to seize as far as the escrow funds. If buyer and seller can reconnect via another market, they can finalize the escrow wallet payment with their 2 private keys. If they dont reconnect, the funds just sit in the escrow wallet forever.
Hackers - cant see them being able to steal all the multisig wallets on a market. theyd somehow have to hack buyers or vendors too to get 2 signing wallet keys.

Where do you get all the stuff for a multisig wallet? Most markets have a walkthrough specific to their multisig. But basically, most ive seen require buyer to have a bunch of signing wallets with public keys and private keys. Some ways to get these from easy to hard (less secure to more secure): Ms-brainwallet or bitaddress has a simple way to bulk generate a bunch of addresses which you can keep and use later Electrum client - console commands to get your public and private keys for wallets in electrum receive tab: getpubkey('1walletaddress1234123445') This gives u a long number starting with number 4 i think) dumpprivkey('1walletaddress1234123445') This gives u a number starting with 5 - keep this private til u signoff. 3. Bitcoin-qt client - similar console commands exist.

Seems long and complicated but if everybody did this and prevented a big part of market scams/seizures from happening itd improve the way markets operate as theyd have to make their money solely from providing a good service. Not with a exit strategy payday in mind when things get rocky or escrow pool looks ripe.

And once u do this a few times, multisig is not hard.

Run a small order with the vendor. Guess is if they accept multisig, theyd be more than happy to let u test a small order multisig.


[1 Points] tom_team:

Simple comic style presentation about it...

http://tom3j5jkjl7327oc.onion/docs/multisig-presentation.html