MPC Wallets: A New Era of Cryptocurrency Security

Multi-Party Computation Wallet or MPC Wallet is a newer way to approach securing cryptocurrency funds that balance security and efficiency. Stolen private keys and both individual and custodian’s crypto wallet security have become a hot topic. A common solution has been proposed to overcome this problem of storing keys in cold storage and using multisig wallets. However, these solutions are still lagging in many aspects. In this article, we should know about the MPC Wallet and how it can help you to secure your cryptocurrencies.

What is an MPC Wallet?

MPC (Multi-Party Computation) wallet is a cryptocurrency wallet that provides enhanced security for storing and managing cryptocurrencies. It uses a combination of advanced cryptography techniques and distributed computing to securely store and manage private keys.

Developing an MPC wallet is more advantageous because it depends on multiple parties to hold its private key as a share. If a crypto transaction can be processed from that wallet certain numbers of shares of the private key should be shared.

Technical Features of MPC wallet:

• Blockchain

Blockchain plays a crucial role in the MPC wallet development that is similar to any other web3 application. Apart from the crypto transactions they can also help them in processing to assist the other technologies. They help to create a new age of cryptographical concepts like threshold signature and multi-party computation.

• Threshold Signature Scheme (TSS)

Threshold Signature plays a vital role in developing an MPC wallet. It helps to generate a single digital signature from multiple signatures before processing the transaction. It is a preferred solution for businesses and organizations as it gives better security for transactions.

• Multi-Party Computation

It is the process of getting input from different parties without revealing them to compute the output. In the wallet application, the input corresponds to sharing the private key and the output is the ultimate private key to process the transaction.

How does the MPC wallet works?

MPC wallet has varied according to the terms of implementation and security protocols. In general, the following steps are taken to develop the MPC wallet.

• Key Generation:

The first step to creating an MPC wallet is to generate keys. The public and private key for the wallet is generated. Only one public key is generated for the wallet and the private keys are generated depending that how many parties are involved. The process has maintained the privacy of the private keys and it is not shared with one another.

• Address Generation:

The generation of public keys can be requested by the signing parties without any problems. In this way, the funds could be transferred to the desired wallet address.

The derivation of the public key is too complex and it is almost impossible to reverse it. So, it is safe to generate a unique public key for each participant and the additional public key can be derived for the allocation of funds to the MPC wallet.

• Access to Funds:

Just like the generation process, the access of funds in the MPC wallet is only possible if the condition meets during its creation are satisfied. For example, if four devices are involved in the generation process, all the devices must be present to access the wallet.

The security of the system has been ensured through a cryptographic system, hardware security modules, and other security measures. The result is that only the device which is originally paired can access the wallet and controls the funds.

Process of building MPC wallet:

The process of developing an MPC wallet are as follows

• Initial Research:

Before starting to develop the MPC wallet we should do some research and analyze the applications. Things to consider such as feasibility, competition, market needs, technology, features, and workflow should be mentioned in the official document.

• Application Design:

After the research, we should need to design the wallet. The application has a better user interface (UI) and user experience (UX) which can attract users.

• Application Development:

The campaign has furtherly moved into the development stage. In this stage, we need to integrate the blockchain with the wallet. Special functionality and Threshold Signature Scheme (TSS) are defined with the help of smart contracts.

• Quality Assurance Testing:

In this case, various test cases are deployed on the MPC wallet to find the errors and that will be resolved promptly. This process can be repeated until the application is bug-free. Alpha and Beta testing with public involvement can speed up the process.

• Launch and Maintenance:

The application is finally launched for public use. The MPC wallet application is continuously monitored and maintained to ensure its security and functionality.

Advantages of MPC wallet:

The MPC wallet has several advantages. The leading financial institutions are already moved to MPC wallets to protect their data from both internal and external threats. Some of the advantages are listed below.

1. Privacy-sensitive transactions: The privacy data such as personal or financial information are secured by a high level of privacy.
2. Decentralized finance (DeFi) applications: DeFi applications can use these wallets to enable secure and private transactions.
3. Shared wallets: Creating a shared wallet can help multiple individuals or entities can jointly control the funds without revealing their private keys to each other.
4. Secure voting: It allows multiple parties to participate in the voting process without revealing their votes to each other.

Why MPC wallet for your business?

The web3 community has realized the need for true and secure transactions. So they adopted the MPC wallet to store their data privately safe. With multiple trustless parties participating in the transaction individuals and businesses can enable enhanced safety of their assets from any malicious functions.

Conclusion:

There are many cryptocurrency wallets available in the crypto space. But their security features are not strong enough. So it’s time to move towards a more secure wallet that can protect your assets and transactions from any malicious activities. The MPC wallet is the best option for your business needs as it provides multiple security features that are needed in this era of digital currency.