Exploring Multi-Party Computation (MPC) in Crypto Wallets
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In the world of cryptocurrencies, security is something that is very important, and because of securing digital assets several innovation had been integrated to ensure the protection of users assets.
Multi-Party Computation (MPC) is one of the security used to secure crypto wallets safe, in fact just of recent we heard about Coinbase use MPC to enhance its crypto wallet security which is a good steps to eliminate insecurity and wallet breaking in crypto wallet and web3 adoption. Crypto wallet using MPC is it safe and reliable? Let delve into the concept of Multi-Party Computation in crypto wallets.
Multi-Party Computation (MPC)can be refers to techniques that is been use to collaborate multiple parties in crypto transaction without revealing their individual inputs. This cryptographic techniques often use in web3 for allowing users to perform some critical wallets operation, generating private keys while also verifying the balances and provide security of each operation.
The real function of Multi-Party Computation (MPC) in crypto wallet is to enables multiple parties to collaboratively perform computations on their respective private inputs and keep the input safe. Any wallet that utilizing MPC, the security of wallet private keys is enhanced, it also minimizing the risk of key shares among the participants, and keep wallet safety against unauthorized access to wallets.
How Does Multi-Party Computation Work?
Unlike a multi-signature cryptocurrency wallet that requires multiple signatures before a transaction can be validate, but I don't know if that kind cryptocurrency wallets is still in use, a cryptocurrency wallet that implement a NofN setup whether it is 3-3 or 2-2 method where two parties shared wallet and all their signature will be require to validate a transaction before it can be considered valid.
source Multisig diagram
But Multi-Party Computation operate differently from Multsig crypto wallets. MPC operates based on the basics principles that doesn't rely on single party. It make use of distribution of trust among multiple parties to perform cryptographic operations. Another name to call those parties distributes the trust can be "shareholders" because they collectively share their input distributed to compute a transaction.
The MPC also employed another protocol that I see it is very unique in crypto wallet security. It make use of advanced protocols "secret sharing and zero-knowledge proofs" that we are all familiar with. I said it's secret sharing, yes the protocols help the parties to collaborate and share a secret input without revealing individual input to one another before computer a cryptographic transaction
What value or benefits does Multi-Party Computation brings to crypto wallets
If this new security level doesn't add values to crypto wallets I believe many of these big crypto companies will not make use of it. Coinbase enhanced it to strengthen the security of their wallets. But there are some other benefits of using Multi-Party Computation in crypto wallets.
1.. Enhanced Security: in terms of security MPC helps to mitigate the risk of a single computation. It will be very hard for attackers to compromise all the parties at the same time, if one is comprised it can not get them access to the information because they will need all other parties input as well.
2.. Privacy Preservation: It's only system that secure each parties input when they share it, it ekll still remain private and other parties will not be able to know throughout the computation.
3.. Trustless Collaboration: MPC will allows parties to collaborate without relying on a trusted third party. This will help in reduce the risk in blind trust and it will provide more transparent like decentralized approach
Walking you through all these I know there will still be a controversial if this is secure protocol. Yes i will consider it secure protocol for crypto wallets because of its security benefits. It is not impervious to potential vulnerabilities. I believe crypto wallets that enhanced MPC will be difficult to attacked because it doesn't support information leakage, it easy to identify malicious behavior, and it involves privacy preservation.