A neutral comparison, checked 9 November 2026. It names no products or providers and makes no forecasts. Neither option is right for every company; the board decides, with its own advisers.
The difference in one line
A 2 of 3 wallet needs any two of three keys to sign. A 3 of 5 wallet needs any three of five. The quorum and the number of keys are fixed when the wallet is created.
Side by side
| Question | 2 of 3 | 3 of 5 |
|---|---|---|
| Keys an attacker must obtain | 2 | 3 |
| Keys the company can lose and still spend | 1 | 2 |
| Signers needed for each payment | 2 | 3 |
| Devices and backups to manage | 3 devices, 3 backups, 1 descriptor | 5 devices, 5 backups, 1 descriptor |
| Independent places to keep keys | At least 3 | At least 5, ideally |
| People or roles needed | Often 2 keyholders plus one stored or provider key | Usually 3 or more keyholders, plus stored keys |
| Effort per payment | Lower | Higher: three signers must be reachable |
| Common use | Small companies; collaborative custody | Larger treasuries with more independent keyholders |
An illustrative calculation
Suppose, only for illustration, that each key had an independent 5% chance of being lost in a year, with no replacement. A 2 of 3 wallet would be stuck if two or more keys were lost: about 0.73% a year. A 3 of 5 wallet would be stuck if three or more were lost: about 0.12% a year. This is arithmetic on an assumed number, not a prediction. In real life losses are not independent: two keys in one building, or two holders who travel together, can fail at the same time. Regular drills and replacing a lost key promptly matter more than the threshold.
Process matters more than the numbers
The extra keys in 3 of 5 only help if they are truly independent: different people, different places, different device makers if the policy allows. A 3 of 5 with three keys in one office is weaker in practice than a well run 2 of 3. Each extra key also adds a backup to protect and a person to brief, and makes the descriptor and key register more important. Use the 2 of 3 simulator to see what still works when a key is lost or stolen.
This site does not recommend single-signature wallets for company money, whichever threshold is chosen.
Questions that decide it
- How many trustworthy, independent keyholders does the company have?
- How often does it need to pay, and how quickly?
- Can it keep five keys in five separate places and test them each year?
- Will it use a collaborative provider for one key?
Common questions
Is 3 of 5 always safer than 2 of 3?
Not always. It tolerates more lost keys and needs more keys to steal, but only if the keys are truly independent and the process is kept up.
Can we change from 2 of 3 to 3 of 5 later?
Yes, by creating a new wallet with the new rule and moving the funds to it. The threshold of an existing wallet cannot be changed.
What about 3 of 3?
With 3 of 3, losing any one key freezes the funds. This site does not suggest it for a company treasury.
Sources
Primary sources only. Each link was checked on 9 November 2026. Rules change, so confirm the current version with your adviser.
- Bitcoin BIPsBIP 11: M of N standard transactions (multisig)
- Bitcoin BIPsBIP 380: Output script descriptors, general operation (wallet backups and exports)
- Bitcoin BIPsBIP 174: Partially Signed Bitcoin Transaction format (PSBT)
- NISTSP 800-57 Part 1 Rev. 5: Recommendation for key management
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