Understanding the difference between MPC wallet and multi-signature wallet in one article

Source: Denglian Community

Although MPC (Multi-Party Computation, Multi-party Secure Computation) wallet and Multi-Signature Wallet (Multi-Signature Wallet) are used to improve the security and control authority of private keys , but their working principles and application scenarios are significantly different.

1. Core difference

2. How it works

Multi-signature wallet

• Principle:

1. Deploy a Smart contracts require meeting a specific signature threshold (such as 2/3).

2. The user submits a signature through the chain, and the smart contract verifies whether the signature meets the conditions.

3. After the threshold is met, the corresponding operation (such as transfer) is performed.

• Implementation method:

• Ethereum: Use smart contracts (such as Gnosis Safe).

• Bitcoin: Use multi-signature scripts (such as P2SH).

• Typical scenario:

• Enterprise asset management: multiple parties need to jointly authorize transfers.

• DAO (Decentralized Autonomous Organization): Governance proposals require signatures from multiple parties.

MPC Wallet

• Principle:

1. The private key is split into multiple shards (Shards), and the shards are stored in different devices or nodes.

2. Transaction signatures are jointly calculated through cryptographic algorithms (such as threshold signature protocols) without the need to recover the full private key on either party.

3. The final generated signature satisfies the signature verification rules of the blockchain (such as ECDSA or EdDSA).

• Implementation method:

• MPC algorithm: Shamir Secret Sharing, Threshold Signature Scheme (TSS).

• Completely off-chain signature: only the final signature result is submitted to the chain.

• Typical scenario:

• Zero trust security model: suitable for applications that require higher privacy and security.

• Business and personal wallets: Wallet applications such as Fireblocks and ZenGo.

3. Security comparison

4. Cost and performance comparison

5. Usage scenarios Comparison

6. Comparison of advantages and disadvantages

Multi-signature wallet

• Advantages:

• The logic is clear and widely applicable to the current blockchain ecosystem.

• Completely operated on the chain, with high transparency.

• Disadvantages:

• Depends on on-chain functions and has high execution costs.

• Private keys need to be managed separately and are vulnerable to single point attacks.

MPC Wallet

• Advantages:

• High privacy and security, the private key never leaves the sharded storage.

• It saves on-chain operation costs and is more suitable for large-scale applications.

• Disadvantages:

• The implementation is highly complex and relies on advanced cryptographic algorithms.

• Specialized infrastructure is required to support multi-party computation.

Summary

• Multi-signature wallet: More suitable for scenarios that require high transparency and complete on-chain operations, such as DAO or on-chain governance.

• MPC Wallet: More suitable for applications that pursue privacy and security and optimize off-chain costs, such as enterprise-level asset management or high-security personal wallets .

Choosing the right solution based on your needs is the key!