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Famous cryptocurrency exchange and futures trading platform Bitget has developed a new security and key management feature for its users. According to this, the exchange team has launched a new wallet service called Multi-Party Computation (MPC). Following the release of the account abstraction wallet service supported by the Ethereum scaling protocol Starknet in July 2023, Bitget took its first step.
Notable Step from the Bitget Team
Bitget, which has taken action to revamp private key and asset management, opted for MPC technology. This method uses a distributed key generation mechanism that distributes multiple key shares to different locations controlled by multiple parties. This method provides a process that requires the owners of distributed private key shares to sign and authorize the transaction.
The MPC wallet eliminates a long-standing industry standard that relies on users storing or memorizing mnemonic phrases and private keys. This wallet offers a user experience without mnemonics and uses a password-based authentication method provided by Bitget to eliminate the need for a single-point private key.
How Does Bitget’s New System Work?
The Bitget team aims to reflect the user experience found in traditional Web2 products and services with this development. Technically, Bitget’s MPC wallet is based on a threshold signature scheme and uses secure large prime numbers. The second development is designed for consumer-grade users and should bring a minimum number for signature authorization that requires two-thirds of the total key shares to complete the signature for authorizing a transaction.
The last key share is securely stored on a backup cloud server, providing a highly decentralized environment and security. The MPC wallet also offers a sharing mechanism that invalidates key shares on old devices when new devices are connected. This mechanism aims to eliminate the risk of key shares being compromised on old or forgotten devices.
Self-custody of cryptocurrency has become an increasingly important part of the wider ecosystem following major failures of centralized exchanges like FTX. In March 2023, hardware wallet manufacturer Ledger raised $109 million in funding to increase hardware production and develop new products.
