Multi-Party Computation (MPC) wallets are a type of cryptocurrency wallet that uses advanced cryptographic techniques to enhance security and privacy. Instead of relying on a single private key held by one individual, MPC wallets divide the private key into multiple shares that are distributed among different parties. These parties work together to compute a signature for a transaction, without ever revealing the complete private key to any one individual.
MPC wallets offer several benefits over traditional wallets. They provide an additional layer of security, as no single party can access the complete private key to steal the digital assets. They also improve privacy, as the private key is never reconstructed in its entirety. This makes MPC wallets particularly appealing to institutional investors and high net worth individuals who want to protect their digital assets from hacks and theft. Additionally, MPC wallets can be used to enable new types of decentralized applications, such as decentralized finance (DeFi) protocols and non-fungible token (NFT) marketplaces.