Cryptocurrency exchange and derivatives platform Bitget has launched a new wallet service using multiparty computation (MPC) to improve security and key management for users.
After launching its account abstraction wallet service powered by Ethereum scaling protocol Starknet in July 2023, Bitget has employed MPC to overhaul private key and asset management.
MPC technology uses a distributed key generation mechanism that distributes multiple key shares to different locations controlled by multiple parties. This enables a process that requires the owners of distributed private key shares to sign and authorize the transaction.
The MPC wallet features a “mnemonic-free” user experience, removing a long-time industry standard that relied on users storing or memorizing mnemonic phrases and private keys. Assets are instead managed using password-based authentication, which Bitget touts to eliminate the risk of a single-point private key exposure.
The exchange notes that the development is aimed to mirror the user experience typically found in traditional Web2 products and services. At a more technical level, Bitget’s MPC wallet relies on a threshold signature scheme, uses secure “large prime numbers” and features a 2/3 threshold setup.
The latter feature is designed for consumer-grade users, introducing a minimum number for signature authorization requiring just two-thirds of the total key shares to complete a signature to authorize a transaction.
Related: Trezor releases new hardware wallet and metal private key backup
The last key share is securely stored on a backup cloud server, ensuring an elevated level of decentralization and security.
The MPC wallet also introduces a reshare mechanism that invalidates key shares on old devices when newer devices are connected. This aims to remove the risk of key shares potentially being compromised on outdated or forgotten devices.
Users can also configure standalone transaction passwords, which ensure that key shares that are held by Bitget’s server can only be used to complete signatures with the users’ active consent.
Cryptocurrency self-storage has become an increasingly important part of the wider ecosystem in the wake of major failures of centralized players like FTX. In March 2023, hardware wallet manufacturer Ledger raised $109 million to increase its hardware production and explore the creation of new products.
Magazine: Ethereum restaking: Blockchain innovation or dangerous house of cards?
Source: https://cointelegraph.com/news/bitget-releases-mpc-wallet-2-3-private-key-sharding