Plain English
A threshold signature is a single cryptographic signature produced collectively by M of N participants, each holding a “key share.” From the outside, it looks like one signature from one key. From the inside, no individual ever held the full key. Used in MPC custody, multisig replacements, and validator key management.
How it actually works
Distributed key generation (DKG) creates the shares: participants run a protocol that ends with each holding a share of a secret key no single party ever computes. Signing requires M shares to combine into a partial signature, then aggregated into a final standard signature (ECDSA, BLS, Schnorr). On-chain, the signature looks identical to a single-key signature — cheaper and more private than multisig.
What it means for you
For HNW custody, threshold-signature MPC (Fireblocks, Copper, Coinbase Custody) is the modern alternative to multisig. The trade-off: it relies on the provider’s software being correct (multisig is verifiable on-chain; MPC is verifiable only through audit). For institutional-scale custody, MPC dominates; for sovereign self-custody, multisig still wins on trustlessness.
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