July 27, 2021

Why the Multisig Wallet is a Must-Have for Enterprises

Source: https://tinyurl.com/r93psu2z/

Nuclear-weapon states require multiple parties to unlock launch codes for a crucial reason — some things are just too important to entrust to one person. Likewise, a corporation needs to secure its cryptocurrency funds against accidental or malicious operations and using more than one person to do it provides a nearly unbreachable level of defense.

In the realm of national defense, this kind of security means two different keys and multiple overseers. In the realm of cryptocurrency funds, it means using multi-signature (multisig) wallets and networks to maintain them.

So what is a multisig wallet exactly?

Multi-signature wallets are wallets that hold cryptocurrency funds but require the input of two or more private keys before effecting a transaction on a blockchain platform. And they’ve been growing as a paradigm in crypto security since they were introduced in 2014.

Protecting the Pack from a Lone Wolf Attack

Allowing only a single user to approve cryptocurrency transactions can cause problems in many ways, especially in a corporate environment. It only takes one disgruntled employee to empty a wallet with enterprise funds of its crypto. But with a multisig wallet, one person does not decide for everyone.

It’s not just malicious intent on the part of someone on the inside that can jeopardize crypto funds. Phishing is the fraudulent sending of emails pretending to be from reputable companies to get users to reveal personal information such as passwords and credit card numbers — and private crypto keys.

Worldwide, 20% of private and public employees from a wide variety of industries fell to phishing attacks last year, and the occurrence of such attacks is certainly not decelerating. With conventional crypto wallets, it only takes one person to fall for a phishing attack to jeopardize an entire enterprise. With a multisig wallet, however, the chance of multiple keyholders falling for a phishing attack is much smaller.

Moreover, no malicious intent may be involved at all. If a private key for a crypto transaction is lost, the result can be disastrous because the funds involved could be lost. In fact, one-fifth of all bitcoin is estimated to be lost because of lost keys.

However, as with phishing attacks, the chance of one user losing corporate funds decreases significantly with multiple signers. To avoid dependency on fixed private keys, a multisig wallet can be set up to allow a certain number of people — but not everyone with a viable key — to approve a transaction. A manager can choose the minimum number of keys needed to unlock a multisig vault, as well as how many keys are allowed to open it.

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What to Consider With Multisig

Although multi-signature wallets offer a significant security advantage, a manager should not decide whether to use them — or which one to use — lightly. It’s true that multiple parties are involved, but a multisig wallet must be configured and used carefully and correctly or some of its advantages, such as not losing funds due to a single lost private key, won’t matter.

Moreover, while multisig platforms have gotten easier to use, great care should be taken to learn the ins and outs of available options before making a final decision.

That’s why it’s essential to choose a multisig wallet that’s as user-friendly as possible, such as AIKON’s ORE Vault. ORE Vault’s overarching platform, ORE ID, is a secure login tool for blockchain that offers considerable advantages over existing blockchain identity and account management solutions.

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Choosing the Best of Multisig — and More

While such solutions are usually wallet apps downloaded to a device or desktop and installed as browser plugins, ORE ID is solely an API. ORE ID’s API-based approach encrypts a user’s keys for all of the public blockchains they use and stores them in the cloud, protecting them through two-factor authentication, with the option for users to store them locally as well.

For a multisig wallet solution to be effective, functionality that should be simple is simple. At the same time, the solution needs to be as extensive in functionality as it is intensive in security.

Accordingly, ORE ID is a user-friendly one-stop shop in all the right ways. For any user in an enterprise, the tool provides a simple signup and login interface with a wide range of choices, including email, SMS, and many popular social media logins. For the developer, ORE ID and its API are open-source and easy to implement. For enterprise managers, the tool provides easy ways to create a blockchain, airdrop crypto to users, and monitor blockchain and user activity with a comprehensive analytics dashboard.

Convenience + Control

Another aspect of a multisig wallet to consider is how confusing and complicated it could be for all users in an enterprise. While most solutions require multiple wallets and integration when different blockchains and devices are involved, ORE ID focuses on cross-chain interoperability. With ORE ID, enterprises don’t have to avoid using a particular blockchain out of fear of not being able to transact with it quickly or flexibly. What’s more, ORE ID can be used on a growing number of platforms, including Etherium, Algorand, EOS, and Telos.

Finally, an important quality to seek in a multisig wallet is how much control one has over the custody of funds within it. ORE ID, for example, is a solution that leverages the benefits of decentralized finance (DeFi).

In this regard, the tool allows users to own and have complete control over their own blockchain identity while being accountable to an enterprise. It does so through a blockchain identity registry that holds public keys and active NFTs linked to a given account rather than personally identifiable information (PII).

With a DeFi solution such as ORE ID, centralized finance (CeFi) exchanges — expensive and autocratic intermediaries with limited transparency and exclusive custody of users’ funds — need not be involved.

Although dozens of platforms offer multisig security options, AIKON’s ORE ID stands to be the best multisig wallet in terms of convenience, capability, and control — as well as security — both now and in the future.