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Secure Multi Party Computation (MPC) is a cryptographic concept that enables multiple parties to jointly compute a function over private inputs without revealing any information to each other.
This is a technique that has been around for 30+ years but has recently started gaining attention due to its ability to address the privacy concerns associated with data sharing in various applications, such as securing digital assets, machine learning, and cloud computing.
In simpler terms, it deals with issues related to managing large quantities of digital assets and has been recognized as one of the most effective solutions for ensuring your protection.This technique is gaining increasing attention due to its ability to address.
In today's climate, hacks and breaches of security occur regularly. Assets are stolen, exchanges are compromised, and seed phrases are lost.
This is where MPC technology comes in handy. How?MPC allows all the inputs to be used by the individual users or devices in creating an output without actually revealing the inputs. This is golden for crypto for the sole reason that private data is held locally while ensuring the computation is performed accurately and efficiently.
It creates a system where trust is no longer an issue, and parties do not have to worry about being compromised.
MPC wallets are a type of crypto wallet that does not require seed phrases and private keys for access. Instead, they utilize key shares that are divided among all parties involved. These key shares are used to access and manage cryptocurrencies.
The result of using key shares instead of private keys and seed phrases is that no single party can control or compromise the wallet. Every transaction is approved or denied by going through a quorum set by share owners.
This quorum is usually set as m of n, where m is the number of approvals needed to execute the transaction and n is the total number of share owners. This completely eliminates the Single point of failure.
Basically, MPC wallets are multisig wallets that utilize Multi Party Computation as an underlying technology. Read about other types of wallets here.
Security - MPC wallets provide increased security against attacks such as keyloggers, phishing, and malware, as the private key is never fully exposed to any device. Instead, the key shares are securely generated, stored, and computed locally—no single points of failure.
Collaboration - MPC wallets provide increased flexibility in managing cryptocurrency funds. For example, different key shares can be distributed to different parties or devices, allowing for more complex access and authorization schemes.
Privacy - When signing a transaction with an MPC wallet, the private inputs remain secret. When the transaction is executed on-chain, you cannot see who signed it and from what address, only that it occurred.
Chain Agnostic - MPC wallets can store assets from any blockchain. You do not need separate wallet providers for storing different coins. You can have everything in one place.
Backup - There are no seed phrases, so the key shares can be backed up using Google Drive, cloud storage, or any other backup option without the need to write it down.
While MPC wallets offer several advantages over traditional single-key wallets, there are also some challenges and limitations associated with this approach:
Computational Intensity - Generating random numbers to create a key share requires computational power, which can slow down the runtime of an MPC wallet.
Slower Approvals - Due to MPC wallets being multisig, transactions can require more time than anticipated since a preset number of parties have to approve a transaction in order for the wallet to carry it out.
Complexity - MPC wallets are more complex for developers to build and maintain, but not for the end user. Users do not see what happens in the background, so the UX can be made very intuitive with the right design.
A common question that arises in the context of securing cryptocurrency funds is the comparison between MPC wallets and multisignature (multisig) wallets. While both approaches enhance security, they operate differently.
Multi-party computation (MPC) technology forms the foundation for multisignature (multisig) wallets, enabling secure management of cryptocurrency funds by multiple individuals or entities.
However, it's important to note that while multisig wallets can utilize MPC technology for added security, they aren't exclusively reliant on it.
Multisig wallets can be implemented using various techniques, including traditional cryptographic methods, but MPC technology offers an advanced and robust way to achieve multisig functionality while safeguarding sensitive keys and transactions.
MPC wallets distribute key shares among multiple parties without ever reconstructing the complete private key. In contrast, multisig wallets require multiple signatures to authorize a transaction, with each signature being based on a separate private key.
This gives MPC wallets a competitive edge as transaction inputs remain private even when the transaction is executed on chain —more on the differences here.
Custody is a critical concern in the crypto world. Many individuals and organizations seek secure solutions to safeguard their digital assets.This can be done in one of two ways. By being the sole custodian of your own assets or to rely on the third party.
If you choose option one, then MPC wallets are the right thing for you. MPC wallets are entirely non custodial and are emerging as a compelling option. With MPC, the private keys are never fully assembled in one place, minimizing the risk associated with a single point of failure. This approach aligns with the security principles of MPC wallets.
As MPC wallets gain traction in the crypto ecosystem, there's a growing trend towards offering them as a service. This approach simplifies the adoption process for individuals and businesses.
We built Bizzllet, a wallet for managing business crypto payments, expenses, and invoices.
Here’s a quick overview of how Bizzllet can help you in your everyday business:
💳 Multi-chain wallets
Create separate wallets for different projects or departments, and give access to your team without passing private keys around.
📐 Roles and rules
Delegate tasks to your team while maintaining full control. Add team members and set different roles & rules depending on their level and seniority.
🔑 Multisig approvals
Sign off important actions such as big transactions or organization changes anytime, anywhere. All with the Bizzllet mobile app.
📊 Monitoring and reporting
Track balances from your wallets, see and personalize transactions with categories, tags, notes, and attachments, and export the data to your preferred accounting software.
🧾 Transactions
Send and receive funds from various blockchains, save recipients in your contact list for future transactions, and share a link with your wallet details.
Here is a mini guide on how to create a crypto wallet.
In conclusion, multi-party computation is a powerful technique that enables collaboration and privacy-preserving computation among multiple parties. Its growing popularity in various applications highlights the importance of privacy and security in today's data-driven world.
Bizzllet is a self-custody solution for storing cryptocurrencies and managing day-to-day payments. If your company could benefit from using Bizzllet, try it for free now.
