A conventional wallet spends whenever one key signs. Multisignature arrangements require a defined number of keys from a defined set, which changes both the theft model and the loss model.
The threshold is written into the rules
A setup is described by two numbers: how many signatures are required and how many keys exist. A two-of-three arrangement needs any two of the three participating keys.
On networks with native support, the condition lives in the script controlling the funds. On networks without it, a smart contract wallet enforces the same logic.
Either way the requirement is enforced by the network rather than by an application, so bypassing the interface does not bypass the rule.
It changes two risks at once
Theft becomes harder because compromising one key achieves nothing. An attacker must reach the threshold, and keys can be held in different places under different conditions.
Loss becomes less catastrophic for the same reason. In a two-of-three, one key can be destroyed and the funds remain spendable by the remaining two.
The tradeoff is that both properties depend on the keys being genuinely independent, which is the assumption most often violated in practice.
Independence is easy to lose
Three keys generated on the same machine, stored in the same building or backed up to the same cloud account share a single failure mode.
Correlated custody defeats the design without changing the threshold, and the setup continues to display correctly while offering the security of one key.
Distribution across devices, locations and, where appropriate, people is what makes the numbers meaningful.
Descriptors are part of the backup
Recovering a multisignature wallet requires more than the keys. It requires knowing the threshold, the full set of public keys and the derivation paths used.
That information is captured in a wallet descriptor or configuration file, and losing it can leave funds unspendable even with sufficient keys in hand.
Backing up the descriptor alongside each key is therefore standard, and it contains no secret material, so it can be stored more freely than the keys themselves.
Coordination costs are real
Signing requires assembling approvals from separate devices, often through a partially signed transaction passed between them.
That takes time, which is a security feature for treasury holdings and a genuine obstacle for anything needing rapid movement.
Organizations often address this with tiered structures: a smaller hot wallet for routine activity and a higher threshold for reserves, so the friction sits where the value is.