Clear DefinitionsSingle-Signature Wallet
2 min read
Pronunciation
[sing-guhl sig-nuh-chur wol-it]
Analogy
Think of a single-signature wallet as a traditional safe with just one key. Only one person needs to turn the key to open the safe and access its contents. This makes it quick and easy to use—you don't need to coordinate with others to access your funds—but if that one key is lost or stolen, there's no backup method to open the safe and no additional verification required to access everything inside.
Definition
A cryptocurrency wallet where transactions require only one digital signature from a single private key to be authorized and executed on the blockchain. Single-signature wallets are the most common wallet type, offering simplicity and convenience at the cost of having a single point of failure for security.
Key Points Intro
Single-signature wallets balance simplicity and accessibility with certain security trade-offs.
Key Points
Direct control: One private key has complete and immediate authority to execute any transaction from the wallet.
Simplified key management: Only one private key or seed phrase needs to be generated, backed up, and secured.
Lower transaction overhead: Requires fewer computational steps and lower fees compared to multi-signature or smart contract wallets.
Universal compatibility: Supported by virtually all blockchain networks and wallet applications as the default wallet type.
Example
John creates a new Bitcoin wallet using a mobile wallet app. The app generates a single private key and corresponding seed phrase, which John backs up securely. When John wants to send Bitcoin to a friend, he simply opens the app, enters the recipient's address and amount, and approves the transaction with his fingerprint. The app uses his single private key to sign the transaction, which is then broadcast to the Bitcoin network and confirmed.
Technical Deep Dive
In a single-signature wallet, each transaction is authorized through one cryptographic signature created with the wallet's private key. For ECDSA-based cryptocurrencies like Bitcoin, this process involves creating a digital signature using the private key and the transaction data. The signature is verified by nodes using the corresponding public key without needing to know the private key itself. In Bitcoin, single-signature wallets typically use P2PKH (Pay to Public Key Hash) or P2WPKH (Pay to Witness Public Key Hash) scripts, requiring a signature that matches the public key hash specified in the output script. Ethereum uses a similar approach but with an account-based model rather than UTXO-based. The private key generates a 65-byte signature (r, s, and v values) using the Keccak-256 hash of the transaction data, which is then verified against the account address derived from the same private key.
Security Warning
With single-signature wallets, loss or theft of the private key means complete and permanent loss of all associated funds with no recovery options beyond pre-established backups. Implement strong physical security for your seed phrase backup, consider encrypted digital backups, and be extremely careful about the environments where you use or expose your private key. For significant holdings, consider upgrading to a multisignature wallet or hardware wallet solution.
Caveat
While single-signature wallets offer convenience and simplicity, they create a single point of failure in your security model. They offer no protection against coercion attacks where someone might force you to sign a transaction under duress. They also lack governance features for shared control of funds, making them unsuitable for organizational treasury management or joint accounts. Advanced security features like time-locks, spending limits, or recovery mechanisms typically require more complex wallet structures.
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