MPC Custody refers to a digital asset custody method leveraging Multi-Party Computation (MPC) cryptography, wherein the private key for a cryptocurrency wallet is never created or stored as a single, centralized entity. Instead, it is mathematically fragmented into multiple distinct shares.
Mechanism
During a transaction, these individual key shares are distributed among several independent parties or computational nodes. Each party performs a partial computation to contribute to the transaction signature without ever revealing its own share or reconstructing the complete private key. This architecture eliminates any single point of compromise for asset control.
Methodology
MPC custody provides enhanced security for institutional crypto investors and trading platforms by removing the singular private key vulnerability inherent in traditional storage methods. This cryptographic approach facilitates secure, threshold-based authorization for large-value transactions, supports granular policy enforcement, and mitigates risks associated with insider threats or external cyberattacks on digital asset holdings.
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