MPC vs Multi-Sig: Choosing the Right Security Model for Your Wallet

The Security Question

Every crypto wallet needs to answer a fundamental question: how do you protect private keys while maintaining usability?

Two dominant approaches have emerged: Multi-Signature (Multi-Sig) and Multi-Party Computation (MPC). Both can achieve similar security guarantees, but they do so in fundamentally different ways.

Multi-Signature: The Traditional Approach

Multi-sig requires multiple independent signatures to authorize a transaction. A 2-of-3 multi-sig, for example, needs any 2 of 3 keyholders to sign.

Pros:

• Well-understood, battle-tested technology
• On-chain transparency (you can see it's a multi-sig)
• Works with existing blockchain infrastructure

Cons:

• Higher transaction fees (more data on-chain)
• Complex key management for users
• Recovery can be complicated

MPC: The Modern Alternative

MPC distributes key generation and signing across multiple parties without ever reconstructing the full key.

Pros:

• Single signature on-chain (lower fees)
• Better UX (users don't manage multiple keys)
• Flexible threshold schemes
• No on-chain footprint revealing security setup

Cons:

• More complex implementation
• Requires careful protocol selection
• Newer technology with less track record

Our Choice: MPC

For consumer-facing wallets, we believe MPC provides a better balance of security and usability. The key factors:

1. UX matters: Users shouldn't need to understand cryptographic key management
2. Cost efficiency: Lower transaction fees at scale
3. Privacy: Security setup isn't visible on-chain

Implementation Considerations

If you're implementing MPC:

• Choose a well-audited protocol (we use TSS with threshold ECDSA)
• Plan your key share distribution carefully
• Build robust backup and recovery flows
• Consider regulatory implications in your jurisdiction

Want to discuss security architecture for your wallet project? Let's talk.