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What is a threshold signature?
A threshold signature lets a group share control of one key so that an agreed number of them, say 2 of 3, can sign together while fewer cannot. The result is a single ordinary signature, which on chain looks the same as one made by a single key.
What it means for you
Unlike on-chain multisig, the rules (who holds shares, how many must sign) are not visible to or enforced by the blockchain; they live in the signers' software. If shares are lost below the threshold, or the coordinating software stops working, the funds are as stuck as with a lost private key.
How it works
NIST describes threshold schemes as spreading a cryptographic operation across n components so that security holds even if some of them are compromised, removing single points of failure. RFC 9591 standardises FROST, a threshold Schnorr scheme: any group of at least the minimum number of participants signs in two rounds, first publishing nonce commitments, then computing signature shares that a coordinator aggregates. The output verifies as a normal Schnorr signature. Key generation is outside the RFC, by a dealer or a distributed protocol. BIP-340 notes that Schnorr's linearity makes such schemes simple.
Sources: NIST IR 8214: Threshold Schemes for Cryptographic Primitives, RFC 9591: The FROST protocol for two-round Schnorr threshold signatures, BIP-340: Schnorr Signatures for secp256k1 · checked 4 October 2026
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