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Cannabis Road Multisig Tutorial

From Their forums: http://forumzxmoorof4ja.onion/index.php?topic=17.0

Cannabis Road market details: Cannabis Road

Hey all.

So you wanna make a payment using the new multisignature system? Most people are getting scared away by this and we have been reading posts on Reddit and other forums about how buyers are getting intimidated by the multisig system because it’s too complicated. Well my goal is to set your mind at ease by explaining it to you as if you were a retard. No offense meant.

First of all, let’s look at a normal Bitcoin address. You can generate unlimited Bitcoin addresses at

On BitAddress you can click “Generate new Address” a bunch of times, until you are happy.
On the left hand side, you’ll see a Bitcoin address and on the right hand side you’ll see a private key.

Copy the private key, and click on the tab Wallet Details and paste it in the box where it says Enter Private Key and click View Details.

You’re gonna see a bunch of numbers pop up. Uncompressed address, public key and private key. As well as compressed address, public key and private key.

The private key is what you use to spend your funds. If you’ve ever used any Bitcoin client other than Blockchain, you know that the private key is the only really important number you need, the rest can be generated from the private key.

The difference between compressed and uncompressed is that compressed takes us less space in the Blockchain. Most people don’t know this, but each transaction in Bitcoin is a certain size and for those of you who use Bitcoin QT, you know how long it takes to download the entire Blockchain every time you install it on another computer.

If you go to https://blockchain.info/ you can see what I mean. On the right hand side you’ll see for each block, Size (kB)

Well, compressed keys and addresses take up less space in the Blockchain, so they were designed so that the Blockchain doesn’t get too big too quickly. So for the forseeable future, we’re gonna use compressed addresses, public keys and private keys.

So you’re gonna wanna select these numbers for your Bitcoin wallet (but use the numbers you generated)

Public Key (compressed, 66 characters [0-9A-F]):

Bitcoin Address Compressed

Private Key WIF Compressed
52 characters base58, starts with a ‘K’ or ‘L’


With me so far? All you need to know is to select the compressed versions of the keys every time.

Just a little explanation here, when your private key is generated, a corresponding public key is generated. The private key is your spending key and the public key is your receiving key, but in order to make Bitcoin more manageable, Bitcoin further refined your public key using multiple mathematical equations down into a 27-34 character address.

For those who want an indepth tutorial on how these numbers are generated, read this tutorial.

So for our purposes in multisig, we mainly need the compressed public key and compressed private key, just remember that. The address really isn’t important in the case of multisig but I wanted you to understand the addressess’ role in Bitcoin wallets first. Nobody uses public keys to receive money because they take up way too much space, so we refined it down to addresses which are about 50% – 75% smaller.

Again, think about how long it takes you to download the Blockchain every time you install Bitcoin QT, saving space is an important goal for Bitcoin.

Ok, now that we have our compressed public key and private key, let’s move on to the next step.

Ok so back to Multisignature addresses.

A multisignature address is generated having the following goals in mind.

1) In order to spend funds in a normal Bitcoin wallet, you need the private key. In order to spend funds in a multisignature wallet you may need multiple keys. What do I mean by may need?

When generated multisignature addresses you can choose how many private keys are required to spend the funds. So for example you can use 2 public keys to generate the multisig address, and require only 1 private key to spend them. This seems like a stupid idea since it defeats the purpose of MULTISIGNATURE addresses, but technically you could.

A better idea is to generated a multisig addresses with 2 public keys that require 2 private keys to spend the funds. This is a little bit more safer because it requires both the buyer and the seller to agree on the transaction in order to release the funds. The problem is, if a buyer or seller has a dispute or one is trying to scam the other, they may never agree to provide their private key to release the funds. This is where we come in at Cannabis Road.

We use what’s described as a 2 of 3 multisig address.

The buyer supplies a public key, the seller supplies a public key and the market supplies a public key.
The multisig address is then set up to require 2 private keys to spend the funds. This way, if the buyer and seller can’t agree on who should get the funds, the market can be the tie breaker and settle the dispute.

This protects the buyer from a scammer seller
This protects the seller from a scammer buyer
This protects the buyer and seller from a scamming market.

The reason is because no one individual has more than 1 private key, and 2 are required to spend the funds. So therefore everyone is protected from everyone else and the market can handle the tie breakers in case of a buyer/seller dispute.

So let’s recap what we learned so far.

Buyer’s public key
Seller’s publc key
Market’s public key

Are all put together to make 1 multisig address that requires 2 out of the 3 private keys to spend the funds.

So once the new multisig address is generated, this is where the buyer will send their funds.
Then once the buyer receives their item or the seller requests early finalisation, the seller will first provide their private key, then the buyer will provide their private key and the funds will be released to the seller.

It really is not very complicated, but I have seen alot of people complaining about how complicated it is.

Now that we talked about the theory of multisig, let’s show you how you apply this to Cannabis Road.

Buyer makes a purchase on Cannabis Road and places their order and is presented with their total.

Under My Account -> My Placed Orders

It will say Require Buyer’s Action – Resolve

Click on Resolve and you will be presented with an address to send your market fee to.

First thing the buyer has to do is send a 4% market fee directly to the market. This is because there’s no good way of making sure the market gets their fees using multisig unless the buyer sends their market fee first to the market.

After the market receives their fee, the buyer will be asked for their public key and their refund address.
You can generate your public key and private key pair at BitAddress.org or BrainWallet.org.

The refund address is where funds will be returned if there is a dispute of which you are the winner.

Next the seller will be asked for their public key and their address to where the funds will be sent once the order is finalized.

Finally the market generates their public key and combines it with the other public keys to generate a multisignature address.

The buyer and seller will be presented with the multisg address and all 3 public keys in case they want to verify that the address was generated using those 3 public keys. Most people don’t need to do this, but some people demand that they have access to all the keys to make sure the market isn’t trying to scam them.

The buyer will then be asked to send the remaining 96% of the order’s cost to the multisig address.

Next the seller will be asked to either ship the item or request to finalize early.

At this point the seller will enter their private key, which is basically providing 1 of the 2 required signatures to release the funds.

Finally the buyer will, when ready, provide their private key to release the funds to the seller.

At this point the funds will be released to the seller.

So remember, the only important things you need to perform this are.

Compressed public key
Compressed private key
A personal Bitcoin address for your funds to be sent to. This can be your Blockchain wallet, your Bitcoin Fog wallet, any wallet.

Public keys are used to generate the multisig address.
Private keys are used to spend or release the funds from the multisig address.

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