Conditional multi-signature (multisig) transactions are a powerful and flexible mechanism for managing funds on a blockchain, such as bitcoin. In this article, we dive into the details of how multisig transactions work and explore the concept of conditional multisig transactions, which allow for even more advanced functionality.
How Multisig transactions work
A multisignature transaction is a transaction that requires multiple signatures to authorise the movement of funds. In the case of Bitcoin, each public key corresponds to a single private key that can be used to sign transactions. When multiple public keys are involved in a transaction, each corresponding private key must sign the transaction before it can be executed.
For example, a 2 of 3 multisig transaction would require two of the three parties to sign the transaction before funds can be moved. This can be useful in situations where a group of people want to manage funds together, but don’t want any one person to be able to move the funds without the approval of others in the group.
To create a multisig address, each participant’s public key is combined with a threshold that specifies how many signatures are required to move the funds. The resulting address is a script that can’t be spent until the required number of signatures have been obtained.
A conditional multi-sig transaction is a type of multi-party Bitcoin transaction where the disbursement of funds is conditional on certain conditions being met. These conditions are encoded in a smart contract called a “miniscript”.Here are some common questions and answers related to conditional multisig transactions and miniscript:
What is a Multisig transaction?
A multisig transaction is a type of Bitcoin transaction that requires multiple signatures to disburse funds. For example, a 2 of 3 multisig transaction would require two of three parties to sign the transaction in order to spend the funds.
What is a minisign?
A miniscript is a simplified scripting language for bitcoin smart contracts. It allows developers to express complex spending conditions in a more user-friendly way, using a smaller set of atomic operations.
How do conditional multiscript transactions work?
In a conditional multisig transaction, the output conditions are defined using a miniscript. The outputs of the transaction are locked with the multisig script, but the spending conditions are encoded in the miniscript. When the parties wish to spend the funds, they construct a new transaction that satisfies the miniscript conditions and contains the signatures of the required parties.
What are some use cases for conditional multisig transactions?
Conditional multisig transactions can be used in many different scenarios, such as escrow, fundraising or multi-party agreements. For example, in an escrow scenario, the funds would be locked in a multisig transaction and the spending conditions would be defined in the miniscript. The funds would only be released to the recipient when the conditions are met, such as when a certain period of time has elapsed or a certain event has occurred.