As multisig technology develops, it becomes more and more relevant to the cryptocurrency world. Multisig wallets are much more potent than before, which brings them closer to practical usability for crypto holders. Essentially, what they allow you to do is create a peer-to-peer security network where each point has to verify a transfer. In other words, there’s no single point a hacker can attack to create a security breach and initiate a fraudulent transfer. In a way, they work similarly to cryptocurrencies themselves, which rely on the blockchain to maintain their stability.
As such, it’s no surprise that many cryptocurrencies are adapting to the new technology. As of July 9th, 2021, Dogecoin has also joined the wave of innovation, moving the address of its developer fund. It’s now in a multisig address that provides more safety than a single digital signature structure.
And if you’re a Dogecoin trader, you’ll likely want to follow in the same footsteps.
Using multisig wallets is quite simply a matter of security. As you’ve likely already heard a million times, preventative measures are king in the crypto world. Once you’re compromised, there’s often little you can do to recover your digital assets. As such, preventing a breach is the only viable way to go. And as we said, using a multi signature wallet goes a long way towards that.
The trick is fairly simple. Your multi signature wallet generates a number of private keys and signatures with each transaction. Ideally, all the private keys are distributed among different participants, but you can also hold multiples on some devices.
So let’s say you initiate a transaction and get compromised. That’s no big deal as other key holders can see that something strange is going on. They can simply decline to verify the transaction, and it won’t go through. That way, to create an opening, hackers need to get M out of N parties, where M is the predetermined minimum required number of participants for verification.
As it usually goes in the crypto world, no technology holds an advantage in every regard. Multisig wallets still have some properties that are worse than they are with similar technologies.
For starters, there’s the obvious obstacle of speed. Since a transaction requires multiple people to sign off on it, it will naturally take longer to complete. If you’re acting as multiple parties in a transaction, you mitigate the issue, but then you also compromise some security.
Also, the process of generating multiple private keys for each transaction slows cryptocurrency wallets down. That’s largely up to individual wallets, and with tech getting better, it’s becoming less of an issue.
Next, there’s the significant issue of pricing. Again, since there are multiple keys, the gas fees become steeper, thus reducing your profits. That’s the most prominent reason among single digital signature wallet users to refuse the switch. Again, as technologies develop and more options open up, the issue becomes less substantial.
The last and least prominent issue is security. While multisig is definitely safer than single signature technology, it has its own minor issues. One of them is that transfers are an on-chain process, which can reveal participants. That can expose them to cyber assailants or overall perturb those that want to remain entirely anonymous.
Should You Keep Dogecoin in a Multisig Wallet?
While we did name some negatives about using a multi sig wallet, they’re fairly minor. With how far the technology has gone, they are better than most other ways to store cryptocurrency. They keep a good deal of the convenience of single signature wallets while upping security. The safety isn’t quite up to cold storage levels, but then again, hardware wallets have a whole different set of issues. So out of everything, a Dogecoin multi-signature wallet may be your best bet.
The next question is self-imposing; which Dogecoin multisig wallet should you use? We mentioned that multisig technologies have developed to the point where there’s a fair bit of competition. Let us share the best ways to store dogecoin with you.
Ownbit is a longstanding wallet that provides users the option for Dogecoin storage and multisig transfers. However, this crypto wallet suffers from a few notable issues, one being the lack of public information. The wallet provider doesn’t ever present a comprehensive list of all of its features. It’s also a bit dated speed and price-wise. The list of supported coins Ownbit has is also fairly short.
Furthermore, it does very little to tackle traditional multisig technology issues. Admittedly, it is fairly simple to set up, which may buy some goodwill from potential users. Overall, while it is safer than keeping your Dogecoin in a single signature wallet, it’s also significantly pricier. For sparse transactions, it may do the job, but it will put a dent in active traders’ profits.
The disadvantages of dogecoinmultisig.org should be apparent as soon as you open the webpage. It was one of the first multi signature wallets that supported Doge, but is now severely dated. It involves a more complex setup than our previous entry and suffers from many of the same issues. The exact features are unclear, including the price of moving your crypto around.
And the most severe issue is that it is a spicifically Dogecoin wallet, which means that it doesn’t support any other digital currencies. In other words, that means there are next to no trading capabilities on the wallet itself. If you wanted to trade Dogecoin for another coin, you’d need to transfer it from dogecoinmultisig.org’s wallet elsewhere, trade, convert it back to Doge, and then back to Dogecoinmultisig. If you were counting, that was at least three trades for a simple action, all of which require time and have gas prices. As such, if you’re interested in trading in any capacity, dogecoinmultisig.org is entirely unviable.
Is There a Solution?
Both of the options for Dogecoin multisig wallets come with heavy downsides. They aren’t viable options for anyone intending to utilize Doge for anything other than an extremely rare transaction. However, you’re in luck since there is a third option that blows the first two out of the water. Here, we’re talking about WhaleHeaven’s WH Cypher wallet.
WH Cypher is one of the few multi signature wallets that managed to tackle most of the issues multi-signature technology imposes. By combining traditional multisig with threshold signatures and other modern crypto tech, it overcomes much of the difficulties it’s faced with. Here, we’ll present some of the fixes it introduces.
You may have noticed dogecoinmultisig.org and Ownbit both suffer from having limited cryptocurrency options. WH Cypher web wallet breaks that as it’s structured to work across all blockchains. That means WH Cypher users won’t be limited to just one type of transaction or locked into only holding Doge.
Instead, WH Cypher is an everyday crypto tool with full trading capabilities. But its trading potency doesn’t only come from the ability to trade numerous currencies, which leads us to our next point.
While the other two are bashful about showing their pricing, WH Cypher is proud to tell you about it. By combining threshold signature technology with multisig, it reduces the number of private keys it needs to generate. In turn, that reduces the cost of each transaction to a fraction of other multisig wallets. While the Dogecoin gas fees in particular aren’t that different, other coins have much lower gas prices, which helps with trading and converting. Additionally, the wallet itself is free, so you can even set up multiple addresses without spending a dime.
Building on the TSS technology we mentioned previously, another significant advantage of WH Cypher is speed. TSS acts differently in the key generation phase in that it doesn’t require multiple approval transactions and multiple keys. Instead, it divides key generation to multiple users, so each one has a fragment. That significantly improves the speed at which you can make transactions over more standard multisig options.
Security and Privacy
WH Cypher is thorough in its approach in that it even tackles the least significant issue of standard multisig wallets. Namely, since it uses off-chain cryptography for its transactions, it eliminates the problem of on-chain exposure. As such, all participants can remain entirely hidden for any given transaction.
That makes it even more difficult for hackers to exploit a security gap in a transaction. Not only are there multiple parties they’d need to breach, but they’d also need to find the participants as well. As you can already guess, that’s a nigh-impossible task to accomplish unless the participants are extremely irresponsible about their own safety.
As far as Dogecoin multisig technology goes, it would be difficult to come by a better option than WH Cypher. It’s a modern wallet that merges a modern and intuitive interface, a simple setup, and full multisig functionality. It positions itself over other multisig dogecoin wallets by staying cheaper, more accessible, and more versatile.
WH Cypher feels like the next logical step in multi signature wallet technology and crypto safety in general. It allows users to start using multisig transactions without much effort while actually being safer than other options. As such, it’s a technology that could be mass-adopted rather than having the regular multisig reputation of being obscure and complex.
For Dogecoin specifically, it’s a fantastic way to have a multisig option that’s both quick and supports multiple currencies. If you’re looking for a multi signature wallet that’s easy to use, has trading capabilities, and is cheap, you’d be hard-pressed to find a better option.