Can crypto wallets be both accessible and hacker-proof
The operations of the blackhats and the uncertainties in crypto trading and management, which if mismanaged, could lead to bankruptcy, have given rise to the emergence of crypto wallet applications with promises to securely store private keys associated with cryptocurrencies. Many have opted for the service to maintain full control and ownership of their digital assets, and unfortunately, some applications have failed, with reference to the recent hack of the Ronin network - a renowned key platform powering the popular Web3 game Axie Infinity, causing the loss of US$600 million worth of ETH and USDC.
Similarly, the security of other different storage options available, such as hot and cold cryptocurrency wallets and multi-signature wallets, could be compromised by hackers, coupled with their overwhelming nature, thus the reason for this article: can crypto wallets be both accessible and hacker-proof?
MPC, an acronym for Multi-Party Computation, is a promising way to balance accessibility and security in the storage of private keys. MPC is a cryptographic protocol that enables computation across multiple parties, where no individual party can see the other party's data. Private keys are split into shards and distributed among trusted parties allowing them to sign transactions without anyone having the entire key.
One of its security advantages is that a private key is never available on a single device during its life cycle even when it’s used, and likewise, the approach secures the key even if some parties are compromised. Also, it permits the rotation of the key shard, which could be employed to maintain security and render any compromised key shard useless if stolen by a hacker.
Unlike hot wallets, where the private key is stored on a user’s device and can be compromised if the device is hacked, or the cold storage wallets that permit offline storage of private key, with the cumbersome issues that come with retrieving the device each time a user wants to sign a transaction, MPC is more secure and accessible easily. The summary of what MPC offer include:
- crypto transaction privacy
- easier access and possible quick trading as no multiple signatures are needed
- optimised key management and structural anonymity
- maximum private key security.
Possibly, the multi-party computation could be the remedy as it offers more robust security and easy crypto-trading access in the dense crypto world plagued by uncertainties.