Gavin Andresen - 2012-03-18 14:00:45

The more I think about it, the more I realize that this workflow is possible without P2SH: it's also possible with simple elliptic curve multiplication.  Smartphone generates a stream of key A's from a seed, computer generates a stream of key B's, and given the public keys from the smartphone, the computer can generate the public key for C, which is used as the receiving address.  Recovery remains the same: two seeds instead of one.

How are signatures created when the phone or computer needs to spend some coins?

I'm told it IS possible to break a single ECDSA key in half and then have a complete signature generated without either device ever knowing the entire key, but, if I recall correctly, the solution involves several communication round trips between the devices and some very sophisticated cryptography.  The multikey solution is much simpler.

If I'm wrong, then great! The single ECDSA key solution will get adopted for wallet security and multisigs will only be used for escrow.

RE: makku's question "How do you identify transactions that belong to you in the first place?"

I think it is wrong to think of coins involved in a multiparty multisignature transaction as "belonging to you."  They don't belong to you-- you have to agree and cooperate with other keyholder(s) for the transaction to be spent.

You are involved in the transaction, but you need some extra information that isn't in the blockchain to know how you are involved (are you an arbitrator? a person getting paid?  a person paying somebody? something else?).