The term multisig stands for multi-signature, which is a specific type of digital signatures that can be created through the combination of multiple unique signatures. The multisig technology makes it possible for two or more users to collectively sign digital documents or cryptocurrency transactions.
Despite the fact that multisig has been extant within the world of cryptocurrencies, the principle is one that existed long before the creation of Bitcoin. The technology was first implemented to Bitcoin addresses in 2012, but the first multisig wallet was only created one year later.
In short, the funds stored on a multi-signature address can only be accessed when 2 or more signatures are provided at the same time.
As a simple analogy, we can imagine a secure deposit box that has two locks and two keys. One key is held by Alice and the other one is held by Bob. The only way they can open the deposit box is by providing their both keys at the same time, so one cannot open the box without the approval of the other.
This means that multisig wallets offer an additional layer of security and by using this technology, users are able to prevent the problems that often occur with the use of single-key wallets (the ones that rely on a single private key to be accessed). By having a singular key, the funds of common cryptocurrency wallets are protected by a single point of failure, and that is why cybercriminals are constantly developing new phishing techniques to try and steal the funds of cryptocurrency users.
Since multisig addresses require more than one signature to transfer funds, they are also suitable for businesses and corporations that may want to store funds on a shared wallet. This would mitigate the risks that arise by keeping the funds in the hands of a single person or by handling a single private key to multiple individuals at the same time.