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Monero Opens the Door to Multi-Signature Transactions

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Monero Opens the Door to Multi-Signature Transactions

Monero, a privacy-centric coin that has crawled up in price over 2017, announced on December 17 multi-signature features will be merged in the next release. While this does not mean an immediate deployment to the public network, it does imply that Monero is much closer to a widespread rollout.

The multi-signature (or multi-sig) development is bound to make monero a very viable currency for OpenBazaar, a project that started in 2016 to become a free online marketplace, with no platform fees and no restrictions on what can be sold. Currently, bitcoin, ether, litecoin, zcash, and dash are accepted, but the multi-sig capability for monero would prove useful on OpenBazaar for escrow purposes, as well as a variety of other marketplaces.

Another potential application is for Dark Net Markets (DNM’s), which have been enthusiastic about the cryptocurrency in recent months; the monero-only Libertas opened shop in October 2017.

Not only that, but multi-sig would play into monero’s favor regarding Coinbase, which is rumored to start supporting the coin in 2018. Multi-sig would allow for Coinbase to potentially offer customers Monero Vault, the same kind of secure storage the exchange offers for bitcoin.

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Monero users are able to build from the master source code and start using multi-sig addresses right now, but it will still take some time for this to trickle down into online wallets, SPV wallets, and there is no word at this time on the impact this has for integration with Ledger hardware wallets. It should not take long, as this would only be an upgrade to wallet software and is not a change on a protocol level.

Multi-signature technology is used in wallets where multiple keys, or signatures, is required to move funds. Typically, either ‘2-of-3’ or ‘3-of-5’ signatures are enabled for wallets, but the practice, first seen in bitcoin, are technically “M-of-N,” so in theory, any number of signatures could be used.

Numerous applications for multi-signature wallets are available, everything from 2-factor authentication (2FA) for increased security (2 of 2 signatures) to a transaction between a buyer and a seller as well as a trustless escrow (2 of 3 signatures). Coinbase offers both 2-of-3 and 3-of-5 multisig, which they call Vault. Bitfinex uses a 3-of-5 multi-sig address in a cold storage wallet for securing bitcoin on the exchange.

The price of monero (XMR) has remained strong above the $300 handle since breaking above this level on December 12. From the beginning of November, the altcoin has exhibited a steady upward surge from around $88 to an all-time high of $357.17. The price at the time of writing stands around $346.65 on the Kraken exchange.

 

This article was updated December 19.

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