Revolutionizing Security: Deep Dive Into MPC & Threshold Cryptography

June 9, 2023

Revolutionizing Security and Privacy: A Deep Dive into Multi-Party Computation (MPC) and Threshold Cryptography

In the increasingly interconnected digital world, safeguarding personal information has become more binding than ever before. From personal data storage to online communication and transactions, it is essential to ensure that personal information is both private and secure. Fortunately, trailblazing technologies like Multi-Party Computation (MPC) and Threshold Cryptography have emerged to address these pressing concerns.

Here's the exciting part, MPC and Threshold Cryptography are not separate entities but rather technologies that complement each other to create a stronger shield for privacy and protection. They tend to work hand in hand to help secure computations on all distributed data while making sure users’ sensitive information is kept confidential.

You might be wondering how these tools achieve such incredible feats. On the one hand, MPC aims to allow multiple parties to compute data to arrive at a desired result without requiring members to expose their respective private data contents. And on the other hand, Threshold Cryptography aims to take security to the next level by addressing the vulnerabilities associated with traditional cryptographic systems by distributing private keys among multiple parties.

In this deep dive, we will explore the ins and outs of MPC and Threshold Cryptography, shedding light on their importance and practical applications.

Understanding MPC

MPC protocols have been around since the 1980s. But it entered the digital asset space only recently, becoming one of the primary technologies for wallet providers and custodians currently utilizing it to secure crypto assets. Now, you might be wondering: What is an MPC protocol? How does it work? And what are its applications? In the following sections, we’ll explore these questions to deliver a comprehensive understanding of MPC.

What Is MPC

So, what exactly is MPC? To unravel the intricacies of MPC, let's start by examining the earlier protocols it built upon. Traditional computation methods involved sharing individual inputs or private data that were vulnerable to leakage or interception. One such method was the Trusted Third Party (TTP) method designated to handle sensitive information by acting as a central authority. As the method relied heavily on trusting third parties, it introduced many vulnerabilities and a single point of failure. On the other hand Secure Multi-Party Computation, or SMPC, enables collaborative computations while masking individual inputs. Another technology worth mentioning is Homomorphic Encryption which allows computations to be worked on the encrypted data directly without decryption. However, homomorphic encryption is not yet widely adopted due to its computational demands and the complexity of integrating it into existing systems.

MPC is a powerful tool that addresses these issues by utilizing advanced cryptographic techniques that allow computation on encrypted data, ensuring that sensitive information is kept confidential. For example, in the world of digital assets, an MPC allows multiple parties, like wallet providers and custodians, to work together on computing a result to secure crypto assets while at the same time preserving the privacy of their inputs, for example creating a transaction without revealing private keys.

Still not sure how it works? Well, let's come up with a situation. Imagine there are three co-workers, Karl, Inez, and Brian, who would like to compute their average salaries. But they don’t like the idea of revealing their salary information to each other.

That is a tad bit complicated, right?

How do you compute your average salary without spilling the beans on your salary? 

This is where MPC comes to the rescue!

In this situation, the trio can utilize a secure MPC protocol to calculate the average salary without ever revealing their individual salary information throughout the process.

Therefore, the two basic properties that an MPC protocol must ensure are:

1. Privacy:

Individuals' private information cannot be deduced or inferred and remains undisclosed when executing the protocol.

2. Accuracy:

Even if some parties in the group attempt to deviate from the prescribed instructions or share information during the execution of the protocol, the cryptographic protocol ensures that the honest parties are protected and are not coerced into revealing information or even exposing their confidential information.

But why is MPC the standard in the digital realm today?

Let's break it down.

To use digital assets, users are provided both a private and a public key. As long as the private key is safe, there will be no problem when it comes to safely transferring and holding assets. But here's the catch: if someone ever gets their hands on a user’s private key, they can easily transfer assets to any wallet. Therefore, it is crucial to protect private keys to maintain digital security.

Now, let's take a quick look at the different ways a private key can be stored. 

Historically, there were four options available:

1. Hot Storage

Where the private key is stored online.

2. Cold Storage

Where the private key is stored offline, typically with a trusted third party.

3. Hardware Wallet

A method of cold storage where private keys are held on a physical device with no connection to the internet.

4. Multisig Wallets

Where multiple private keys are required to authorise transactions on a wallet.

While the above-mentioned were the go-to choices at one point for digital asset storage, security and operational inefficiencies in them led to the development of more advanced tools, such as MPC-based wallets. MPC goes beyond secure storage; it can handle both storage and digital assets transfer.

As the digital asset market expands and evolves, there is a growing demand for security tools that have the ability to keep up with the fast-paced nature of transfers and accommodate complex strategies. And MPC, a robust tool, has emerged as a solution that can address these challenges effectively.

MPC offers an effective combination of not only security but also flexibility, allowing multiple parties to securely collaborate while preserving their privacy. With the ability to handle both storage and asset transfers, MPC has become an invaluable tool in the ever-changing landscape of digital assets.

MPC Applications

MPC has a wide range of applications across various domains owing to the ability to enable secure collaboration while preserving privacy. Let's explore some of its applications:

Secure Data Analysis:

MPC is extensively used where multiple entities need to collaborate on confidential information. For example, financial institutions can take advantage of the features provided by MPC to analyze the transaction patterns of banks without having to disclose customer information. The institutions can detect fraud and malicious activity while ensuring the customer’s information is kept private.

Collaborative Machine Learning:

Machine learning requires access to private datasets. In this scenario, MPC is employed where organizations can train machine learning models with their datasets collaboratively while keeping information secure and private. This will open windows of advancements in fraud detection, personalized services, and healthcare research while enabling data privacy.

Secure Voting Systems:

MPC has the potential to revolutionize the traditional voting system that is in place today. With the introduction of an MPC protocol, the final results can be revealed without any individuals’ voting preference revealed, ensuring confidentiality, trustworthiness, and protecting the democratic rights of civilians.

Digital Auctions:

In the recently introduced digital auctions system, bidders can submit encrypted bids where the auctioneer computes the winning bid without decrypting any individual bids. Bidder anonymity is protected, and collusion is prevented, maintaining the integrity of all auction processes.

Digital Asset Custody:

MPC-based wallets can be used to effectively safeguard user’s digital assets by providing enterprise-grade security to individuals and small businesses, which is exactly what we do at Krayon.

Exploring Threshold Cryptography

Threshold Cryptography is a subfield of cryptography where cryptographic operations, such as decryption or signature generation, are distributed among multiple participants. In such a system, the cryptographic keys are split into multiple shares, and a minimum number of shares, known as the threshold, are needed to perform the operation. When used in conjunction with MPC it enables the threshold to be computed without ever combining key shares.

Unlike traditional systems, it avoids relying on a single authority and ensures no one person has complete control. This teamwork approach makes it harder for hackers to break in and manipulate sensitive data.

Understanding Threshold Cryptography

Threshold Cryptography and Multi-Party Computation (MPC) both aim to secure data and computations across multiple parties. They often work together to enhance the privacy and security of data processing and transactions.

In essence, MPC enables multiple parties to compute a function over their inputs while keeping those inputs private. It allows the computation to happen in a way where each participant doesn't learn anything about the others' input beyond what can be inferred from the result.

Threshold Cryptography complements MPC by dividing the cryptographic keys into shares and distributing them among multiple parties. A minimum number of these shares, known as the threshold, is needed to perform a cryptographic operation like decrypting data or signing a transaction. This means that no single party has complete control over the cryptographic process, enhancing the security and privacy of the system.

When combined, MPC and Threshold Cryptography can provide an enhanced level of security. The joint use of these technologies allows for complex computations to be carried out securely and privately across distributed systems, while ensuring that no single entity has full control over the process.

For example, in a scenario involving a transaction on a blockchain, MPC could be used to ensure that the transaction can be computed without any party revealing their private data. Meanwhile, Threshold Cryptography could be used to ensure that the transaction is only authorized when a certain number of parties agree to it (i.e., when the threshold is met), thus preventing any single party from having full control over the transaction.

These technologies work together to provide a robust framework for secure, decentralized computations and transactions, protecting against both internal and external threats.

To better understand how this works, let’s consider a real-world scenario. Imagine a high-security vault that requires the presence of three people to unlock it. Isn't that always better for security than entrusting the key to a single person? Similarly, Threshold Cryptography allows individual keyholders to lock up a secret in a way that one person cannot open it alone and divides the keys into shares and distributes it among a group of people. A certain number of keyshare holders (known as the threshold) must come together and combine their keyshares to unlock the secret.

Now, let's consider another scenario where you are part of a board of trustees that comprises ten members. Your board wants to keep a secret safe, so they divide the private key needed to encrypt it into different pieces, assigning one piece to each member. No member knows about the others or who owns the remaining pieces. For actions to be authorized involving the secret, the board unanimously agrees that a consensus of at least seven members is required. Therefore, for any operation to move forward, at least seven out of the ten members must agree. Let's say half of the board is compromised; they still cannot figure out the secret, as they need at least seven in their team which is very unlikely. Therefore, the system stays secure as long as most participants, more than the required threshold, act fairly and democratically. I should also clarify here that the key shares themselves don't need to be kept secret in the same way as the original secret or private key. In a threshold cryptography system, the key shares are not useful on their own, and cannot be used to reconstruct the original key without having the required threshold number of other key shares.

To summarize, threshold cryptosystems use a clever strategy of dividing secrets among multiple participants and setting a minimum threshold for unlocking them. Decrypting the shared secret or signing a message requires the collaboration of some, but not necessarily all, keyholders. Thereby enhancing security and ensuring the system keeps running smoothly, even when some participants are compromised or unavailable.

Furthermore, when Threshold Cryptography is combined with MPC, the security and privacy of all the tasks are further strengthened. This combination adds an extra layer of protection, making unauthorized access or manipulation of the information even more challenging.

Threshold Cryptography Applications

Threshold Cryptography provides enhanced security compared to many other cryptographic techniques, leading to its adoption in various operations, protocols, and applications. It finds utility in multiple sectors, including the Internet of Things, authentication, cloud computing, ad-hoc and sensor networks, and more!

Secure MPC:

As mentioned before, MPC and Threshold Cryptography go hand in hand. In a scenario that uses an MPS protocol, Threshold Cryptography will distribute cryptographic keys among multiple parties enabling secure collaborations. Let's say a group of individuals is working on a collaborative analysis project. MPC will ensure they can compute a result while keeping individual inputs confidential, while Threshold Cryptography will ensure that no single participant has complete control.

Cryptocurrency Wallets and Managing Keys:

Cryptocurrency wallets are a breakthrough for digital asset holders. It relies on cryptographic keys to complete transactions securely. Threshold Cryptography can enhance the security features of such wallets by distributing keys among a trusted group of individuals mitigating risks of key compromises or even single points of failure. In addition, hackers and malicious actors cannot gain unauthorized access to steal funds from these wallets.

Secure Cloud Storage:

With the increase in the use of cloud storage, data security as well as integrity have become paramount. Threshold Cryptography offers a viable solution where the data owner can generate a secret key, split it into several parts, and distribute it to all data users before uploading the file to the cloud.

Multi-Signature (MultiSig) Wallets:

Wondering what these are? These are special types of wallets where multiple people work together to approve a transaction. Think of it like a group of friends who all need to give their OK before making a big decision. Let's say you are part of a board of trustees and would like to transfer funds from your treasury to a charity. With a Multisig, all board members would have to sign off on the transaction for it to go through.

Final Thoughts

In this digital era, collaboration is key. However, when sharing sensitive information, privacy concerns almost always hinder this process. MPC and Threshold Cryptography are revolutionizing secure collaboration. They are tools that help to protect privacy and, at the same time, allow groups to work together on computations.

MPC enables joint computations and secure data analysis, offering a flexible approach to securely process sensitive information without revealing individual inputs. On the other hand, Threshold Cryptography can divide secrets among multiple parties. Such features ensure that no single entity has complete control, minimizing any risk of compromise while strengthening security. By diving into the principles, protocols, and applications of MPC and Threshold Cryptography, we can unlock their potential in various sectors like data analysis, voting systems, and machine learning. What's even more fascinating is how these tools can be used together to create stronger security and privacy in distributed systems.

In conclusion, by learning and harnessing the powers of MPC protocols and Threshold Cryptography, we can equip ourselves with the knowledge and skills to make the most of secure collaboration today. These tools enable the protection of sensitive information and help to find creative solutions that empower digital endeavors. As researchers keep pushing the limits and making improvements, we can look forward to a future where collaboration in the digital realm is both secure and decentralized. So let us embrace and unlock the potential of these technologies to pave a path for a more secure and collaborative digital world!

Krayon uses SMPC and Threshold Cryptography to provide you with enterprise-grade wallets. It’s free to signup and takes less than a minute. Secure your digital assets with Krayon!

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