Crypto Wallets

Setting up a wallet
MPC Wallets
  • Basically, an MPC wallet is a wallet like any other, except that the private keys and their control are divided between several devices. Each of these devices has under its control a key that, when joined to the rest, enables the use of the funds within said wallet. At first glance, it seems that we are talking about a wallet or multi-signature purse, and to some extent, the construction of the MPC wallets is identical.
  • This with the exception that the MPC wallets include other improvements, such as the fact that the control devices can generate dynamic keys for a single use and with an expiration of time, which when added to the rest, enable the use of funds. In addition, MPC wallets can use schemes like the common ECDSAEdDSA, other more up-to-date signature formats such as threshold signaturesSchnorr firms, or other additional security schemes.
  • Imagine for a second, a wallet linked to several single-use key generators, which together give you access to your cryptos. The fact that the generators are dynamic and single-use guarantees that a key will never be repeated, and if the sequence is not complete, you simply will not be able to access the funds. This means that while you can access a device and copy the rest of the wallet keys, if those keys have expired or have been used, the funds will be inaccessible. This level of security allows creating barriers that hackers can hardly break, avoiding such painful episodes as hacking Mt Gox, or even loss of access from QuadrigaCX.
  • Another point in favor of the MPC wallets is that the control mechanism is applicable to several cryptocurrencies at the same time, greatly simplifying the security management of the tokens.
Sources and Articles on MPC Wallets
Importing vs Sweeping Private Keys
Public vs Private Keys

Let's take a look at signing and verifying with public and private keys as an example.

Alice and Bob are communicating. Alice wants to make sure that Bob's public announcement is indeed from Bob, so:

  • Bob gives Alice his public key.
  • Bob signs his announcement with his private key.
  • Bob sends Alice his announcement and its signature.
  • Alice verifies the signature with Bob's public key.

Alice can verify the source of the announcement by checking if the signature was done with the private key that corresponds to Bob’s public key (which is already known to represent Bob).

RPC Connection