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Cryptocurrency exchange and derivatives platform Bitget has introduced a new wallet service utilizing multiparty computation (MPC) to enhance security and key management for its users.
Following the launch of its account abstraction wallet service powered by the Ethereum scaling protocol Starknet in July 2023, Bitget has implemented MPC to revamp private key and asset management.
MPC technology employs a distributed key generation method that allocates multiple key shares to various locations overseen by different parties. This facilitates a process that necessitates the owners of the distributed private key shares to sign and authorize transactions.
The MPC wallet offers a “mnemonic-free” user experience, eliminating a long-standing industry norm that required users to store or memorize mnemonic phrases and private keys. Instead, assets are managed through password-based authentication, which Bitget claims mitigates the risk of exposing a single-point private key.
The exchange highlights that this development aims to replicate the user experience typically associated with conventional Web2 products and services. On a more technical level, Bitget’s MPC wallet is based on a threshold signature scheme, employs secure “large prime numbers,” and incorporates a 2/3 threshold configuration.
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This latter aspect is tailored for consumer-grade users, establishing a minimum requirement for signature authorization that necessitates only two-thirds of the total key shares to finalize a signature for transaction approval.
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The final key share is securely stored on a backup cloud server, providing an enhanced level of decentralization and security.
The MPC wallet also features a reshare mechanism that invalidates key shares on older devices when newer devices are connected. This is intended to eliminate the risk of key shares being compromised on outdated or forgotten devices.
Users can additionally set up standalone transaction passwords, ensuring that key shares held by Bitget’s server can only be utilized to complete signatures with the users’ active consent.
Cryptocurrency self-storage has gained increasing significance within the broader ecosystem following the notable failures of centralized entities like FTX. In March 2023, hardware wallet manufacturer Ledger secured $109 million to boost its hardware production and investigate the development of new products.
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