69. MPC Wallet and Multilateral Computing: Innovative Technology for Privacy and Security
In our increasingly digital world, where personal and financial data represent valuable assets, safeguarding their protection and confidentiality is of utmost importance. One tool that plays a crucial role in achieving this goal is the MPC (Multi-Party Computation) wallet and multi-party computing.
Interestingly, although the theory of MPC has been in existence since the early 1980s, it only made its debut in the digital asset sector a few years ago. Since then, MPC has emerged as a primary technology employed by portfolio providers to enhance the security of digital assets. In this article, we will delve deeper into what MPC entails and the advantages it offers in terms of data privacy and security.
MPC Portfolio: Definition and operating principles
The MPC Wallet is an advanced cryptographic technology that enables multiple participants to collaborate on computations without divulging sensitive information. In essence, MPC facilitates computations on encrypted data without the necessity of revealing this data to other parties.
The fundamental principle of the MPC portfolio is to distribute the computational process among various participants in such a manner that each participant retains access only to their individual input data and results. No party gains access to the complete content of other participants’ data. The final calculation result remains accessible solely to authorized entities, thereby ensuring full control over data privacy and confidentiality.
Key properties offered by the multilateral computing protocol include:
1. Privacy: Information held by each party remains confidential and cannot be inferred from the protocol in use.
2. Accuracy: If the parties opt to share information during the protocol’s execution, MPC ensures that neither party can obtain an incorrect result or make the data public.
Importantly, in MPC, a finite number of participants hold portions of private data (d1, d2,…,dN). Based on this private data, participants can jointly compute the value of a public function while keeping it secret.
Why MPC is becoming the standard for digital asset security
As you have learned in our educational programs, digital assets require a public key and a private key for functionality. The security of your assets hinges on the safeguarding of your private key. Losing your private key equates to losing your assets.
To ensure the security of private keys, the cryptocurrency sector provides several options, including:
1. Online Storage of the Private Key (Hot Storage).
2. Offline Storage of the Private Key (Cold Storage).
3. Offline Storage of the Private Key on a Physical Device (Hardware Wallet).
Inefficiencies and security concerns related to these options have driven the development of new solutions, notably MPC (multi-party computing). Intriguingly, MPC solutions are not limited to asset storage but also enhance the security and speed of transactions.
In addition to digital technologies, MPC finds applications in various domains:
1. Finance: In the financial sector, MPC portfolios are used to securely process and analyze customer data without disclosing sensitive information. This is especially critical for activities such as portfolio management and lending.
2. Medical Data Protection: Within healthcare, MPC portfolios contribute to maintaining patient medical data privacy during data processing and analysis for diagnosis or scientific research, such as a patient’s medical history.
3. Network Security: MPC wallets can bolster network security by analyzing and detecting threats without revealing sensitive network information.
How private keys work with MPC technology
MPC technology extends beyond private keys to encompass other data and information. Thanks to MPC, there is no need to centralize the storage of keys, information, or data. Instead, these components are divided into segments, encrypted, and distributed across multiple parties.
The involved parties independently compute their portions of the private key (information and/or data) to generate a signature without revealing the encryption to other parties. This means that there is never a point where the private key or the associated information is created in a single location.
Multilateral computing effectively addresses the problem of centralized data storage by distributing it across multiple devices. With this technology, it becomes considerably more challenging for hackers to launch attacks and steal keys or sensitive information, as they would need to breach multiple sites rather than a single one.
With a completely secure private key, users can confidently secure their online assets without requiring additional security devices.
Types of MPC Algorithms
While multilateral computation is a powerful tool, it’s worth noting that not all MPC algorithms are created equal. Presently, the primary algorithms used in MPC are the Gennaro and Goldfeder algorithms. These are considered some of the best algorithms for MPC and are favored by many institutions safeguarding their digital assets. However, one drawback of Gennaro and Goldfeder is their lack of flexibility.
Another MPC algorithm is the one developed by Lindell et al. However, it does not achieve the same level of operational efficiency and is consequently less popular.
A further algorithm used in MPC is the one by Doerner et al. Here too, the level of performance does not meet the requirements of today’s markets.
Summary
MPC wallets and multilateral computing represent innovative technologies that enable collaborative data processing while preserving privacy and security. These technologies find broad applications across various domains where data is invaluable and requires protection. They empower advanced computing, data analysis, and collaboration without exposing sensitive information. In today’s digital world, MPC plays a pivotal role in elevating data security and privacy standards.
Complete today’s lesson!