Multisig is Personalized PoW
Proof-of-Work (PoW) is well-known for providing the security backbone of the Bitcoin network. PoW makes attacking Bitcoin computationally difficult, ensuring that the only viable way to do so is through brute force and massive energy consumption. By anchoring digital data to real-world energy expenditure, PoW gives Bitcoin its value and credibility. PoW is why a bitcoin is as “real” as an ounce of gold.
However, what many people may not realize is that multisig is also a form of PoW, but at the individual level.
A properly set up multisig wallet can add additional dimensions of security to your bitcoins, such as time and space.
Time: Keys in a multisig wallet (or more advanced smart contracts) can be timelocked, meaning they can only be used after a specified date in the future. If an attacker were to get hold of your timelocked key, they would have to wait until the timelock expires to use it. In other words, time becomes a form of PoW. If the timelock is enforced on-chain, you are effectively "borrowing" Bitcoin's PoW for your own wallet.
Space: Keys in a multisig wallet are usually geographically distributed, making it very difficult for an attacker to gain access to your funds. For example, a company can store their treasury fund in a 3-of-5 wallet, with keys kept cold and dispersed in San Francisco, New York, Cape Town, Dubai, and Tokyo. To access the treasury, an attacker would have to travel the physical distances between these locations, which requires a lot of energy and resources. This is also a form of PoW.
You can even combine time and space. For instance, the keys in Dubai and Tokyo could be timelocked for five years, making it even harder for an attacker to access them.
In the same way that energy expenditure ties the Bitcoin ledger to the physical realm, geographically distributed and timelocked multisig ties your wallet to concrete physical elements, building a fortress around your bitcoins.
By contrast, a plain vanilla single-signature wallet's private key can be accessed in a single location, at a single moment in time. Such a wallet is very unforgiving when it comes to mistakes and determined attackers.
As the saying goes, "Anything that can go wrong will go wrong." Engineers understand this principle well. Over a long enough time horizon, bitcoins stored in single-signature wallets will inevitably get lost due to a combination of accidents, death, and poor inheritance planning.
Multisig wallets can help us prevent this future and ensure that Bitcoin stays true to its original promise: a multi-generational store of value.
