Skip to content

MPC Wallets – Security Taken To The Extreme

  • by

Security in the world of cryptocurrency is a matter which is very serious One instance to illustrate this would be the design of the famous MPC purses, or wallets. They combine several technologies that are designed to provide the most secure security commercial and military-grade security and protection of the cryptocurrency in a way it is nearly impossible to steal them without the permissions needed to do so.

But what exactly is an MPC wallet? What makes them secure? This and many other questions will be addressed in this article dedicated to learning more about the latest cryptocurrency wallets.

What’s the difference between multiparty computing? MPC?

Before deciding on what constitutes an MPC wallet or purse it is essential to understand what MPC is also called multi-party computing. MPC is also known as Multiparty Computing is a cryptographic concept. security. It was developed to create security models where different components are required for accessing the system’s resources. Each of the parties has keys that is when linked to the other, permits users to access the systems to be opened and managed. The control may be total or limited, based on the amount the access that is given.

The development of these protocols dates back to the year 1970 They have evolved to the point where nowadays, a lot of these systems are actually embedded in computer chips in order to maintain the security of computer systems.

Due to the many potentialities due to its enormous potential, people in the cryptocurrency community have been keenly interested in this kind of technology. In reality, David Chaum In 1988 was the first to present an acclaimed work with the title of “Unconditionally safe multi-party protocol”. However, Nick Szabo, in 1999, also published the well-known book “God’s protocols” in addition to describing the advantages of MPCs within the field of computing and their applications in economic as well as financial system. This gives us an understanding of the significance of these protocols and their entry into the world of cryptocurrency.

MPC wallets and security extended to the maximum

The MPC wallets, also known as multi-party computing wallets the full form of these wallets. They are an era of wallets that support Tokens and cryptocurrencies that aim to provide the best security standards to both those who are who are concerned about security as well as for corporations as well as governments and banks that want to transform cryptocurrencies into an appropriate asset to support their business.

In essence it is the MPC wallet functions similar to any other wallet, with the exception it has private keys, and their management are distributed across several devices. Each device is controlled by one key, which, when connected to the other allows the use of funds in the wallet. From the outside, it appears we’re talking about a wallet or a multi-signature purse. To a certain degree, the design that is used in these MPC wallets is similar.

It is with the caveat that MPC wallets come with other features that are noteworthy, for instance the fact that control devices are able to generate dynamic keys in one usage and have an expiration date that when combined with the other keys, permit the utilization of funds. Furthermore, MPC wallets can use strategies like the standard ECDSA, EdDSA, other contemporary signature formats such as threshold signatures Schnorr companies, or different security methods.

Imagine, for a moment the possibility of a wallet that is linked to multiple single-use generators, that together grant the user access to their cryptocurrency. The fact that generators are asynchronous and single-use assures that a key can never be duplicated or re-used. If the sequence is not completed then you cannot access your funds. This means that even though you may access devices and copy key wallets, in the event that these keys are expired or been utilized, the funds cannot be accessed. This security level allows the creation of barriers that hackers could barely break, thus avoiding horrendous incidents such like hacking Mt Gox, or the loss of access from QuadrigaCX.

Another benefit of MPC wallets is the fact that the control mechanism can be applied to a variety of different cryptocurrency simultaneously which greatly simplifies the security management of tokens.

Integration of hardware and software

Another benefit of MPC accounts is that they allow for an enhanced integration between the hardware and the programs they comprise. As an example the MPC wallet is an isolated device that could be linked to signature devices. This is accomplished via a cryptographic software powered by modules. The HSMs (Hardware Security Modules) could render these funds unobtainable via an online attack and unaffected by hacks of any sort. If the devices synchronizing not functioning as they should it is possible that synchronization will not happen which means access is denied.

Naturally, this can be flexible. In the event of an emergency the wallet could be configured to carry out the “recovery transaction” which will transfer the funds to a trusted custodian to retrieve balances. This will ensure that from happening, for instance, following the loss or theft of devices or keys. the money is kept for the duration of MPC’s MPC wallet, allowing for their return without issue.

The integrations, as well as new features allow MPC wallets safer than traditional wallets or multi-signature wallets. But, they also make them more costly, and difficult to manage in daily use environments and, therefore, this kind of technology is intended for exchanges, companies or those who manage huge amounts of cryptocurrency and need the most secure security they can get.

What exactly is an MPC wallet function?

The functioning of the MPC wallet is largely dependent on its operation and the security features which are employed in it. In a fundamental way, the functioning that happens with an MPC wallet is separated into three distinct parts:

Key generation

Key generation is the complete procedure of creating public and private keys inside the wallet. Additionally, the key generation process includes the registration of both public and private keys for the devices that allow unlocking the wallet.

In this way the unlocking devices create a pair of private and private keys. These are then linked to other devices to create using them the public and private key for the MPC wallet. Like a multi-signature wallet, this method aims to separate the control over the wallet in order to stop a malicious or hacker person from being able to obtain the wallet easily.

Furthermore the generation of these keys is governed by a specific procedure, which is described in the mathematical formula:

F (d1, D2, 3,) = maximum (d1 2, d2)

This means that every participant has private information (recognized as d1, D2 or d3 all the way to dN). The existence of these private details permits the utilization of a function that is public known as F. By using it, the value of private data is determined and the usage for the wallet permitted. The algorithm used in this instance is the selected cryptographic signature algorithm. It could include ECDSA, EdDSA, Schnorr or any other one compatible. This means that the total of the private information will provide a cryptographic assurance that is required for an access point to the account.

Generation of addresses

At the moment it is clear that at this point, MPC wallets are not different from the wallets we are familiar with. The creation of public keys is a possibility for any of the signers without difficulty. This way the requested funds will be received at that address.

This is possible because of the way that asymmetric cryptography operates. The process of generating your public key can be so difficult that the reverse process is almost impossible. Therefore, it is safe to generate a private key for every participant. In addition, from it the other keys that are public can be generated that permit the transfer in funds for the MPC wallet. In this way it is the goal for the MPC wallet is to control the private key that is split into multiple devices. Therefore, the management of balances is not at risk.

Access to money

Similar to the generation process, access to funds is granted only when the requirements established in the process of creating the MPC wallet are fulfilled. If during the generation three devices that stored private data were included and were able to access the wallet, those three devices must be in use to access the wallet.

At present it is possible that the security of devices could be provided by security systems, cryptographic systems (HSM) and other safety options. In reality, only the original devices are the only ones that can access MPC’s MPC wallet and managing the funds.