2 of 3 multisig refers to a type of cryptographic signature scheme used in cryptocurrencies or other digital transactions. It involves three parties: two of which must agree to approve a transaction before it can be executed.
In other words, to initiate a transaction using a 2 of 3 multisig scheme, at least two out of three parties must sign the transaction. This adds an extra layer of security and prevents any single party from unilaterally authorizing transactions.
For example, in a 2 of 3 multisig setup, three parties might include a buyer, a seller, and an escrow service. If the buyer and seller agree on a transaction, but the escrow service doesn’t approve it, the transaction cannot proceed. This helps ensure that funds are only released when all parties have agreed to the terms of the transaction, reducing the risk of fraud or other types of malfeasance.