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Digital Asset Wallet Security - A Comparison: Multi-Signature and Multi-Party Computation

Part of BitGo’s Security Series for Institutional Investors

Defining Multi-Signature and Multi-Party Computation Protocols

It is important to consider all aspects of implementation and security when deciding on a protocol for storing your company’s digital assets. In this piece, we take a look at the benefits of multi-signature technology and compare it to multi-party computation as a stand-alone solution to protect digital wallets.

What is Multi-Signature (Multi-Sig)? Multi-Signature is a blockchain security feature which allows two or more users to securely sign documents as a group. In the case of digital assets, funds are stored using a multi-signature address and must be accessed by two or more keys, which are held by separate entities. This enables digital asset holders to create additional policy layers of security for their funds.

What is Multi-Party Computation (MPC)? Multi-party computation is a cryptographic method that has just begun to be applied to digital wallet security. Multi-party computation protocols enable a single key to be split across multiple entities or individuals. With multi-party computation, the key is never combined in one location or on one machine. Multi-party computation uses an iterative process to rebuild a digital signature using mathematical operations that are conducted on separate machines. The resulting signature appears identical to a single signature system.

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Digital Asset Wallet Security - A Comparison: Multi-Signature and Multi-Party Computation

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