What is MPC?

In the world of crypto assets, Private Key management has always been a core challenge for asset security. It is estimated that losses of digital assets due to lost or stolen Private Keys reach hundreds of billions of dollars each year. Traditional mnemonic phrase and Private Key management methods have become a security nightmare for many users due to their single point of failure risk.

The emergence of MPC technology is fundamentally changing this situation. This article will delve into the concept and principles of MPC, as well as its innovative applications in Gate.io, helping you gain a comprehensive understanding of this key technology that reshapes asset security.

What is MPC? Basic Concept Analysis

MPC, short for Multi-Party Computation, is translated into Chinese as "多方安全计算" or "多方计算". It is a cryptographic protocol involving the joint participation of multiple parties.

It enables multiple participants who do not trust each other to jointly complete a certain computational task without disclosing their private data. In simple terms, MPC allows parties to compute using their data together, but no one can see another's raw data.

In the field of Crypto Assets, MPC technology is widely used in wallet solutions, as it eliminates the risk of single points of failure through distributed key management.

Core Principles of MPC Technology: How to Achieve Secure Computation

Threshold Signature Scheme (TSS)

MPC wallets use a threshold signature scheme (TSS) to eliminate single point of failure risks. The system disperses the Private Key into multiple fragments, and no one can fully control the Private Key; this process is known as distributed key generation (DKG).

When a signature is needed, each party combines their respective shards and the message to be signed to jointly create a valid signature. Any node that knows the public key can verify this signature, and from the blockchain perspective, this transaction is no different from a transaction issued by a regular wallet.

Basic Working Principle

Taking a typical two-party secure computation as an example, its workflow can be divided into the following steps:

• Boolean circuit generation: converting the function to be computed into a Boolean circuit
• Encryption circuit generation: Alice encrypts the truth table to obtain the encryption circuit.
• Data encryption and transmission: Alice encrypts her input and then sends the encrypted input along with the encrypted circuit to Bob.
• Collaborative computing: Bob obtains encrypted input by executing the Oblivious Transfer protocol with Alice.
• Result Decryption: Bob uses the encryption inputs from both parties to decrypt the encrypted circuit gate by gate, obtaining the computation result.

threshold mechanism

MPC adopts a threshold signature mechanism, splitting the Private Key into K key shares, and sets a threshold value M. As long as any M participants are involved in the signing, a valid signature can be generated.

For example, if the threshold is set to 6 among 10 nodes, then only any 6 nodes are required to complete the signature, which combines decentralization and high availability.

Comparison of MPC and Traditional Wallets: Technical Advantages Are Obvious

To intuitively demonstrate the difference between MPC wallets and traditional wallets, please refer to the comparison table below:

| Comparison Dimension | MPC Wallet | Traditional Wallet | | --- | --- | --- | | Key Management | Private Key is sharded, there is no complete Private Key | Depend on complete Private Key or mnemonic phrase | | Single Point of Failure | No Single Point of Failure | Loss of Private Key or mnemonic phrase results in loss of assets | | Signature Mechanism | Threshold Signature, Flexible Settings | Single Signature or Multi-signature | | Recovery Options | Off-chain recovery, no on-chain transaction fee required | Reliant on mnemonic phrase backup | | Transaction Cost | Displayed on-chain as a regular address, gas fees are the same as regular transactions | May require higher gas fees depending on complexity | | Compatibility | Fully compatible with existing blockchain infrastructure | Dependent on specific standards |

From the table, it can be seen that the MPC wallet outperforms traditional wallet solutions in terms of security, flexibility, and usability. It eliminates the risk of single points of failure, provides a more flexible signing mechanism, and reduces recovery costs.

Gate Exchange's MPC Wallet Practice: The Perfect Combination of Security and Convenience

Gate.io has deeply integrated MPC technology into its wallet solutions, providing a secure and user-friendly digital asset management experience.

three-party security architecture

Gate's MPC wallet adopts an innovative tripartite security architecture, splitting the access key into three different shares, with each share stored in a different location:

• User device share: A share is stored on the user's personal device.
• Cloud storage share: Another share is securely encrypted and stored in cloud infrastructure.
• Gate system share: The final share is kept within Gate's protection system.

This distributed architecture makes unauthorized access extremely difficult, greatly enhancing overall security.

design without a mnemonic phrase

Unlike traditional wallets that rely on mnemonic phrases, Gate's MPC solution completely eliminates the need for secret phrases or Private Keys.

This design choice significantly reduces the risk of users losing access to their funds due to forgetting their mnemonic phrase, greatly simplifies the user experience, and is particularly friendly to newcomers in the crypto assets space.

Emergency Recovery Mechanism

Considering various situations that may arise in actual use, Gate's MPC wallet has also designed emergency measures: allowing users to export their Private Key when necessary, ensuring that access to the assets can be restored even if one share is leaked or lost.

This feature provides additional security guarantees, allowing users to enjoy the convenience of MPC technology without worrying about the risk of asset being permanently locked.

The Prominent Advantages of MPC Wallet: Why Choose MPC

The wallet solution based on MPC technology brings multiple advantages:

Strengthen security measures

By dispersing access keys across multiple locations, MPC wallets significantly reduce vulnerability to hacking. Even if an attacker obtains one of the key shares, they cannot complete a valid signature, ensuring asset security.

user-friendly design

MPC wallet eliminates the need for complex mnemonic phrase and Private Key management, greatly simplifying the user experience. Users can use the crypto wallet just like traditional internet services, without worrying about the risk of key loss.

absolute asset ownership

Users maintain complete control over their digital assets without relying on third-party custodians. This is consistent with the core principle of decentralization while providing higher security than traditional self-custody solutions.

Flexible Access Control

Institutional users can set up a multi-approval mechanism and can also add time locks, multi-factor authentication, and other additional security layers. Individual users can choose a semi-custodial model, allowing a trusted third party to hold part of the key segments.

The Application Prospects and Development Challenges of MPC Technology

wide range of application scenarios

MPC technology has a wide range of application prospects in the crypto assets field:

• MPC Custodial Wallet: Multi-institution or multi-end collaborative asset management
• MPC Custody Wallet: Institutions provide users with secure asset security for Crypto Assets custody.
• Privacy transactions and identity verification: suitable for situations with extremely high privacy requirements.
• DAO and Distributed Organizations: A system that requires multi-party collaboration for validation.

Current Challenges

Despite the obvious advantages of MPC technology, it also faces some challenges:

• Insufficient standardization: The MPC algorithm has not been fully standardized and lacks native support from high-security devices such as the iPhone Secure Enclave.
• Compatibility issues: not compatible with traditional wallets, no mnemonic phrase, no single device to store the complete Private Key
• Centralized risk: The signature authorization strategy is managed off-chain, posing a certain degree of centralized risk.
• Ecosystem limitations: Most MPC libraries and solutions are not open-source, making independent auditing and integration difficult.

With the continuous development of technology and the advancement of standardization, these challenges are expected to be gradually resolved, and MPC technology is likely to become the standard configuration for digital asset management.

Conclusion

MPC technology represents the future direction of digital asset security management. It provides enterprise-level security guarantees through cryptographic innovations without compromising user experience. The MPC wallet practice of Gate.io has proven the feasibility and practicality of this technology, offering users a secure and convenient asset custody solution.

As the Crypto Assets industry continues to develop, advanced security technologies like MPC will become increasingly important. Whether you are an individual investor or an institutional user, understanding and adopting MPC technology will help you effectively manage associated risks while enjoying the opportunities that the encryption world brings.

Security is an endless battle of offense and defense, and MPC technology undoubtedly provides a powerful weapon for this fight.