Saturday, 8 September 2018

Steps to Create Shared Bitcoin Wallet and Why to Use One

Cryptocurrencies is one of the biggest known term now a day and is all set to gain more in future. One of the very amusing feature is smart contract which is basically programmable money. Smart contracts are the automated transactions which are based on certain conditions. Multi-signature action or shared wallet is the application of smart contract.


How shared Bitcoin wallet(Multisig) works

The bitcoin shared wallet application allows users to store both Bitcoin cash(BCH) and Bitcoin core(BTC) and the ability to create shared wallet. Creating a shared wallet is not that touch and gives the advantage of extra security. These shared wallets are also called as multisig(multisignature) wallets.

Multi-signature wallets are close to joint accounts in traditional banking system and is accessible by two or more users. Every transaction in Bitcoin shared wallet must be authorized by all the authoritative holders. Before you spend any coin, it must be approved by co-signer. If the requirement to create a community or trust managed fund these wallets are the perfect solution.

Why use multisig wallet

Shared wallets are the ordinary wallets with not so ordinary features. Using shared wallets has its own advantages and few of them is here:

-       Security: Shared wallets secures all your transactions either for single user multiple devices or shared accounts. A single user can also secure all the transactions of the wallet by creating a shred wallet. If in case due to any reason you lose your smart phone you need not to worry about the transactions. Reason being the thief would not be able to execute any transaction as it requires permissions from co-signers. This automatically increases the security for you.

Account history: It plays an important role in management of shared account history. When the account is jointly owned all the co-owners has access to the history and passbook of shared wallet which helps in accounting management.

Consent of all co-owners: As the wallet belongs to group of people any transaction or action seeks opinion of all the parties. Since the transaction cannot be authorized without the required authorization from the co-owners it promotes mutual consent from all within app.

3rd party Escrow or mediation: In the cases where you want to buy something online or make any bet.

How to create shared wallets

Download and install wallet app. The application is available for iOS, Linux, windows, android.

Navigate to home screen and click on “+” icon to create your wallet.

Select create shared wallet from “add wallet”.

There comes the account set up. Choose your wallet name, your name, Number of co-payers, total number of signature required etc.

The number of co-payers is all the users who has access to this shared wallet and the number of signature required is the minimum number of signature required to complete a transaction with consent.

Once you will click on create a wallet you need to share the invite code with all the co-payers to join the wallet. You can scan the code or copy the text of block and share among all.

You must be thinking that wallet is shared so where is the individual security however it is secured at individual level. Each co-signer will have their own private key which will grant them access to their own wallet.

Note: -

Always keep the number of required signatories less than number of co-signers so that of any of the co-signer loses the device you can still execute the transaction.

Always keep backup of your shared wallet and it is advised to all the participants of shared wallet.