Secure Multiparty Computing (MPC) is a cryptography technique that allows multiple parties to jointly compute a function without revealing their private data. One of the main areas of application of MPC is securing cryptocurrency wallets. What are their advantages over traditional wallets?
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What is the MPC?
the secure multiparty computation (also known as secure computation, multiparty computation (MPC), or privacy-preserving computation) is a subfield of cryptography whose goal is to create methods for third parties to jointly compute a function over their ” entries” while preserving the private nature of the latter. For example, using the MPC, a group of friends can discreetly determine their average earnings (“outputs”), without revealing how much each of them receives (“inflows”).
One of the main applications of MPC is the development of wallets to secure cryptocurrencies. The security of a crypto wallet is of paramount importance, because it holds the user’s private keys, which allow access to its cryptocurrencies. Thus, to guarantee the security of a cryptocurrency wallet, the MPC can be used by allowing several parties to jointly calculate the private keys without revealing them to each other.
Let’s take the case of the ZenGo wallet to illustrate how the MPC works. With this mobile wallet, multiple parties (a remote server and a smartphone) can jointly perform cryptographic functions (like generating keys, signing transactions, and verifying transactions) without either party revealing their respective information.
This way, a single private key is never generated, split or reconstructed in the process.. This adds a considerable layer of security to wallets of this type, making them significantly more efficient in this aspect in particular compared to other wallets using a more classic model.
By implementing the MPC, cryptocurrency wallets can securely design a system that removes the point of failure that is the private key. This provides a more secure crypto custody option by protecting against both private key theft (since there is no unique private key to steal) and lost keysince each party can individually safeguard its secret information in a way that does not expose and compromise the entire system.
So, still taking the example of ZenGo, the famous 12 or 24 word recovery phrase disappears. It is replaced by two mathematical “secret codes” created independently of each other. One of the codes is then stored on the user’s smartphone, while the other is stored on one of ZenGo’s servers.
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What are the advantages of MPC wallets?
Overall, crypto wallets based on MPC technology are an attractive option for users who value security and privacy highly. Here is more detail on what makes the strength of MPC wallets.
Enhanced security
MPC technology allows multiple parties to jointly compute the private keys of a wallet without revealing them to each other. It is therefore much more difficult for an attacker to obtain the private keys and gain access without wallet authorization.
Improved privacy
Confidentiality is one of the main advantages offered by the MPC. It protects the private data of the parties concerned while allowing them to work jointly on this data.
Better control of your assets
MPC can give users greater control over their cryptocurrencies, as they can set the threshold for the number of parties required to sign a transaction. This allows users to customize their wallet’s security and access controls to suit their specific needs and requirements.
Multiple signatures (multi-sig)
MPC can be used to enable multi-sig signature features within a wallet, which require multiple parties to sign a transaction before it can be executed. This provides an additional layer of security and can prevent unauthorized transactions from taking place.
Broad potential for adoption
Wallets based on MPC technology could be more widely adopted in the future, as they offer strong security and privacy benefits.
What are the disadvantages of MPC wallets?
Despite their many strengths, wallets using MPC technology have some potential drawbacks.
The complexity
La MPC involves complex cryptographic protocols and algorithms, which can be difficult to understand and implement. This can present a challenge for developers to create and maintain MPC-based wallets, and can also make it difficult for users to understand how the said wallet works.
The performance
MPC wallets may be slower to execute transactions compared to non-MPC wallets, due to the additional computational load needed to perform the common computation. However, this is generally not a problem for the majority of users, who do not necessarily need to carry out many transactions in a very short time.
Dependence on other parties
MPC wallets rely on multiple parties to jointly compute private keys and approve transactions. This means that this functionality of the wallet relies on the availability and cooperation of these parties. If one or more parties are unavailable or unwilling to cooperate, the wallet may not be able to execute transactions.
Conclusion on Secure Multiparty Computing
Crypto wallets based on MPC technology offer a range of benefits, including increased security and privacy as well as stronger asset control. Despite the disadvantages mentioned above, this does not prevent MPC wallets to be a preferred option to ensure the security of its funds.
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Editor-in-chief of Cryptoast, I discovered Bitcoin and blockchain technology in 2017. Since then, I have been striving to share quality content so that the sector becomes more democratic for everyone.
Clement Wardzala
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