Can you explain the concept of a multi-signature wallet?

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Can you explain the concept of a multi-signature wallet?

Just stumbled over something recently and it's been ticking over in my head. It's about multi-signature wallets. Bit confusing, isn't it? So, this thing, it's supposed to provide extra security or something. Something about needing multiple approvals or signatures to complete a transaction? Might be wrong but it sounds like a good plan, especially with all the system hacks these days. Can anyone here break it down for me, like in simple terms? How does it work and what are the pros and cons? Sorry for the long winded question, just trying to wrap my head around it.

In addition to the added security of needing multiple signatures for transactions, multi-sig wallets can also be useful for shared wallets or accounts. For instance, different members of a team can each hold a 'key'. It could act as a sort of check and balance system, with no single member having full control over the shared funds. Less risk of bad apples running off with the stash, so to speak. What do you guys think about this approach? Any potential downsides here?

Interesting points so far. Here's another angle - what about the implications for inheritance planning? If keys are lost, funds could end up stuck in limbo. Any thoughts on this?

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