The Atlanta-based company, BitPay, has been hard at work developing solutions for businesses and individuals in the bitcoin space, and from this, recently released a beta of their new multi-signature wallet, Copay. The wallet is completely open-source and aims to provide a multi-signature transaction that occurs on the blockchain and allows complete control of user funds.
Released early last week, Copay can change the way bitcoin users think about transaction processes. Multi-signature technology eliminates having to rely on a third-party to store your bitcoins. Instead, what this technology brings to the table is an easy way to safely maintain possession of your funds, with a wallet that has a wide-range of use cases and will likely become the norm for bitcoin in the near future. Similarly, companies like Xapo, BitGo and BoostVC-backed Cryptocorp have unveiled on-blockchain technologies, all working to provide a solution to the central security issue of the use of the private key. Although Bitcoin remains the most secure form of payment, the fact remains that bitcoins can be stolen if someone fraudulently gains access to a user’s wallet. This is what multi-signature technology can solve.
What does Multi-Signature mean for the future?
Multi-signature technology opens the door for a wide range of uses, both for businesses and individuals. For businesses, Copay can provide a great way for small businesses to manage their bitcoins by requiring 3 of 5 authorized members’ signatures in order to approve a transaction and spend funds. At an individual level, a family can create a 2 of 3 wallet for their child to control their spending habits and ensure that the funds are not lost due to a virus or lost password. Each use case can be further secured by one signer controlling a device in a secure, offline location in case anyone loses the online wallet.
Implementation of multi-signature transactions requires multiple signatures from authorized members in order for a transaction to be approved. Furthermore, each member of a Copay wallet can sign a transaction without needing the private key to reside on a single shared device, further solidifying the security of each multi-signature transaction. This means that a thief would need to compromise two or more machines in order to gain access to the funds. In terms of transaction validation, the correct number of signatures is required in order for bitcoin miners to approve the transaction. If there are not enough signatures, miners will reject the multi-signature transaction.
In terms of on-blockchain technology, multi-signature transactions have only scratched the surface. We have only begun seeing the real-life uses and future implications that technologies like Copay can provide. Because Bitcoin (both as a technology and payment method) is so young, it makes little sense to craft regulations around Bitcoin at its current state. We have only seen the beginning of what bitcoin makes possible in terms of frictionless payment, the blockchain, open source technology, the Internet of Things; all of which are very important inventions and can each contain some groundbreaking legal implications.
BitPay initially created Copay to help internally manage company funds. Because of the company’s vision of actively growing bitcoin technology, BitPay believes it is essential for wallet technology to be open source and peer reviewed. Copay is built upon BitPay’s open source bitcoin stack, bitcore, along with Insight, an open source blockchain explorer and API. Copay can be installed as a Chrome or Firefox browser extension as well as a full web version, with easy to understand instructions. To start using the Copay beta visit https://copay.io.
Many experts in the cryptocurrency space believe that this will be the year of Multisig and with companies like BitPay amongst many others leading the way, these predictions may be very accurate.
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