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Author Topic: n-of-m transactions  (Read 77 times)
RealOnTheMF
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December 28, 2017, 04:38:29 AM
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I've seen a few transactions in the blockchain that are n-of-m transactions using the OP_CHECKMULTISIG output script. Is there a common place these are coming from? How does one send one of these transactions?
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December 28, 2017, 05:06:31 AM
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I've seen a few transactions in the blockchain that are n-of-m transactions using the OP_CHECKMULTISIG output script. Is there a common place these are coming from? How does one send one of these transactions?


Are you referring to n of m transactions or m of n transaction?

If it is m of n transactions checkout this link to understand more

https://en.bitcoin.it/wiki/Multisignature
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December 28, 2017, 08:01:35 AM
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These multisig tx can come from everywhere. Everyone is free to create such a tx.
Your question cannot be easily answered in one step, so a good reading would start here:

https://bitcoin.org/en/developer-examples#p2sh-multisig

and also in Andreas' book "Mastering Bitcoin". (it is online available/readable).
There are two types of multisig tx, each having different aspects, but the "P2SH" version with a redeem script should be used nowadays.
The idea behind a multisig transaction is, that you use two or more signatures, to make the transaction valid.
You can compare this to a cheque payment, which needs to have two (or more) signatures to be accepted by your bank.

How to create such a tx: as per the reading above, that also depends on your wallet. Assuming bitcoin core, Gavin gave one of the first examples:

https://gist.githubusercontent.com/gavinandresen/3966071/raw/1f6cfa4208bc82ee5039876b4f065a705ce64df7/TwoOfThree.sh
RealOnTheMF
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December 28, 2017, 10:36:34 AM
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Thanks, that was quite helpful. Outside of a proof of concept scenario, are these transactions very common? Is there any easy way to do this with any of the popular wallets from the GUI?


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December 28, 2017, 11:02:13 AM
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These multisig tx can come from everywhere.... Everyone is free to create such a tx.....
...The idea behind a multisig transaction is, that you use two or more signatures, to make the transaction valid.
You can compare this to a cheque payment, which needs to have two (or more) signatures to be accepted by your bank....


My visualization of it are those
safes that needs more than one key
to be opened ...

 

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December 28, 2017, 03:29:17 PM
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Thanks, that was quite helpful. Outside of a proof of concept scenario, are these transactions very common? Is there any easy way to do this with any of the popular wallets from the GUI?
A few use cases are the use of it in the escrow; escrow can be released without the mediator if the transaction is completed without issues. Coinb.in does this. For the security, some exchange do use multisig in conjunction with third parities such that transactions can only be created with approval from all parties. In Electrum, the TrustedCoin feature acts as a third party and only sign their signature if the 2 factor authentication code is accurate. All in all, yes, there is a good amount of use of multisig.

Electrum is the easiest to do this, just need the public keys of the parties involved.

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