28 Mar, 2025
3 minutes
Multi-Party Computation (MPC) is a cryptography technique by which multi party computation can collaborate to calculate a function without revealing the private input of a party to other parties. That is, each party engages in the calculation without disclosing their sensitive data to other parties, which ensures privacy and security in barter or electronic transfer.
In cryptocurrency and blockchain, MPC crypto is utilized to a large extent in order to grant wallets, custody providers, and private keys an additional level of security. Through the division of a cryptographic key between parties, MPC technology makes available to them the prevention of the point of failure.
Unlike the traditional cryptographic methods that employ a single secret key, MPC meaning is of a nature that no single party has a full transaction. It is most useful for crypto exchanges, institutional investors, and highly secure dApps.
MPC technology is widely applied in cryptocurrency because it can offer more security and privacy. Some of the most significant applications are:
1. Secure Private Key Management. The conventional crypto wallets sign a transaction using a single private key. Once the private key is lost or stolen, the money is gone forever. MPC wallet addresses this issue by splitting the private key into shares such that a quorum of shares must be combined to sign a transaction.
2. More Advanced Custody Solutions. Banks and cryptocurrency custodians employ MPC security to avoid central control over assets. The splits in private keys are distributed among a group of trusted members, making the security of assets greatly improved.
3. Improvement in DeFi Security. DeFi applications tend to deal with humongous amounts of money and thus are a hacker's go-to place. MPC technology makes multi-signature authorization possible without exposing the whole private key, decreasing the possibility of unauthorized entry.
4. Enabling Privacy-Preserving Smart Contracts. Multi party computation may be applied for smart contracts to enable computation over encrypted data. This enables DeFi lending, insurance, and voting systems on-chain to be performed without exposing sensitive information.
Secure Multi-Party Computation (MPC) was originally put forward in the 1980s as a method of multi-party computation of functionality without revealing inputs. It has evolved to become the most secure of all cryptographic protocols for data security and eavesdropping defense in commercial applications.
The key development milestones in MPC
1980s -- Early work by researchers laid out theoretical models of secure multiparty computation.
1990s-2000s -- Development of real-world applications, namely finance and secure voting systems.
2010s -- MPC-CMP was used in blockchain security and crypto wallets, opening the door to institutional adoption.
2020s -- Widespread adoption of crypto custody solutions, decentralized finance, and zero-trust models for security.
Healthcare: Secure sharing of patient data without exposing sensitive medical information.
Finance: Privacy-protection transactions between banks and financial institutions.
AI & Machine Learning: Safe cooperative AI training on proprietary data sets.
MPC blockchain solutions are now necessary in order to secure crypto assets, digital identities, and smart contracts.
An MPC wallet is a category of crypto wallets that uses multi-party computation to protect private keys. Instead of storing a complete private key in one place, MPC wallets split the key into several encrypted shares.
Key Generation -- Instead of generating a private key, the MPC wallet generates multiple key shares and distributes them across parties.
Transaction Signing -- In order to sign a transaction, an amount of fixed key shares is combined to validate it, and security is ensured without the key being exposed in full.
Enhanced Security -- Even if a single share is stolen or hacked, it is useless without the others, and stealing or hacking is much more difficult.
No Single Point of Failure. Private key never in one place, eliminating threats of theft.
Enhanced Security. Eliminates threat of standard seed words and one-key wallets.
Multi-User Authorization. Ideal for companies and institutional investors who need multiple signatures.
Recovery Options. In case a share is lost, wallets can be recovered from the other shares.
There are certain MPC custody solutions that are utilized by various crypto firms, including:
Fireblocks MPC -- Best institutional-grade security platform for holding crypto assets.
ZenGo -- Best MPC-based non-custodial crypto wallet for retail traders.
Curv (Acquired by PayPal) -- Provides MPC-enabled business custody.
MPC wallets are ideal for retail investors and institutions needing increased security without sacrificing usability.
Improved Security. Leaks no private keys and is less likely to be hacked.
No Single Point of Failure. Even if a share is lost, funds remain secure.
Multi-Signature Support. Entities that need a lot of signatures love this.
Private Transactions. Increased privacy without sacrificing on disclosing the transaction information.
Ease of Use. MPC wallets are not as easy to use as hardware wallets since they do not need manual signatures.
Complexity. MPC crypto expertise is needed to securely store the key shares.
Limited Wallet Support. MPC technology does not support all blockchains and cryptocurrencies.
Possible Latency. Transaction signing can be slower with multi-party authorization.
Institutional Cost. MPC crypto custody solutions for business use might be costly.
Aside from the limited disadvantages, MPC wallets are generally found to be among the most secure methods of storing crypto assets in 2025.
In crypto, MPC technology (Multi-Party Computation) is a security measure that divides private keys into several encrypted shares. This means that no one person controls the key entirely, making it safer to do transactions and store assets.
Yes, MPC wallets are amongst the safest means to store crypto. By eliminating the use of a single private key, they are protected from hacks, key theft, and loss. Unlike normal wallets, MPC technology ensures that even in case of a hack of a single key share, funds remain safe.
MPC cryptography is a security technology and not a specific cryptocurrency. MPC technology-based projects, however, include Fireblocks MPC, Curv, and institutional custodians. If you want to have ISO-compliant MPC-supported crypto, look for top-level exchanges.
