🔑 Multisig vs Normal Bitcoin Transactions — What’s the Difference?

🚀 TL;DR

• Normal: 1 input → 1 signature.
• Multisig: 1 input → M signatures (from N possible cosigners).
• SegWit moves signatures out of the txid calculation → cheaper & no txid malleability.
• We collect partial signatures, sort them, and build the final script or witness per input.

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1️⃣ Normal Transactions (Single-Sig)

• Keys: One private key → one public key.
• Addresses:
  • Legacy (P2PKH): starts with 1...
  • SegWit (P2WPKH): starts with bc1q...
• Signing:
  1. Create a sighash for each input.
  2. Sign it once.
  3. Attach the signature and public key.
• Example (Legacy):

  [Signature, PubKey]

• Example (SegWit):
  • scriptSig empty, witness carries [Signature, PubKey].

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2️⃣ Multisig Transactions (M-of-N)

• Keys: N people, each with their own private key.
• Addresses:
  • Legacy P2SH: starts with 3...
  • SegWit P2WSH: starts with bc1q...
• Rule: Any M of these N signatures can spend the coins.

• Signing:

  1. Each cosigner signs separately.
  2. Collect M valid signatures for each input.
  3. Build the final unlocking data:
     • Legacy P2SH:

     OP_0 + Sig1 + Sig2 + ... + RedeemScript
  

  • SegWit P2WSH: Witness stack:

     OP_0 (empty) + Sig1 + Sig2 + ... + WitnessScript
  

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💻 Example: Our Wallet’s Finalization (P2SH & P2WSH)

// Group signatures by input index
for sig in partial_sigs {
    signatures[input_index].push(sig);
}

// Sort by pubkey (BIP67)
sorted_sigs.sort_by(pubkey_order);

// Build final unlocking data
if is_p2sh {
    // Legacy P2SH scriptSig
    OP_0 + all_sigs + redeem_script
} else {
    // SegWit P2WSH witness stack
    [OP_0] + all_sigs + witness_script
}

SegWit version is cheaper in fees and immune to txid malleability.

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⚖ Side-by-Side: Normal vs Multisig (With SegWit)

Feature	Normal	Multisig (Legacy)	Multisig (SegWit)
Keys	1 keypair	N keypairs	N keypairs
Signatures/input	1	M	M
Unlocking data	[sig, pubkey]	OP_0 + sigs + redeem script	Witness stack: OP_0 + sigs + witness script
Fee efficiency	Medium	High cost	Lower cost
Txid malleable?	Yes (legacy)	Yes (legacy)	No (SegWit)

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🌍 Why SegWit Multisig Rocks

• Lower fees: Witness data gets a weight discount.
• No txid malleability: Safer for complex protocols like Lightning.
• Future-ready: Works with Taproot for even more privacy.
• Same multisig benefits: More security, shared control, auditability.

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🛠 When to Use

• Single-sig SegWit: Everyday wallet, low fees.
• Multisig SegWit: Treasury, cold storage, shared accounts — but with cost savings and malleability protection.

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💡 Key takeaway:

SegWit doesn’t change the rules of multisig — it just makes them cheaper, faster, and safer.

If you’re setting up a new multisig today, use SegWit (P2WSH) unless you need legacy compatibility.