Recently, the technology of Qredo’s Multi-party computation has become widespread in this field. MPC or Multi-party computation has attracted widespread attention from the academic community over the past decade. It is a certain thing that the use of this technology will grow in the next few years despite its slow launch.
In the fourth industrial revolution, data became the new currency and introduced us to this digital world. We transfer our data and pay for the use of online services and the service providers use the data to optimize advertising.
To offer high-quality and cost-effective services, organizations also feel the need to share their data with other parties to move forward. There are some strict laws and regulations regarding data sharing which include GDPR and CCPA. It prevents the unauthorized flow of sensitive data. Sharing and storing confidential data might be vulnerable to attacks and theft so these laws exist.
Importance of MPC technology
MPC technology proves itself as the most useful thing for two purposes:
- To secure data exchange
- To secure data storage
It can be used to share the data analysis process without any need to share the actual data. It reduces the need for data sharing.
It can be used for distributing cryptographic keys. This significantly increases the security of data storage as the key is shared between several people.
Working of MPC
Qredo uses a breakthrough in Multi-party computation. It is implemented using a threshold signing scheme (TSS) which decentralizes the private keys. MPC nodes contain the fractions of decentralizing keys that are distributed all over the network. Nodes generate a digital signature to sign transactions.
In the majority of MPC implementations, shared secret keys are created and stored on multiple virtual machines. They are also stored on vulnerable hardware enclaves such as Intel SGX. Usually, the same organizations control these nodes. They leave the assets open to rogue employees and collude the cloud providers or colluding partners who decide to go without funds.
MPC nodes are distributed across the security-enhanced Tier 4 data centers with Qredo. It is distributed across the global financial hubs which are controlled by Qredo-chain. Qredo-chain is a two-layer network that provides an immutable registry of assets and actions. Every change in the wallet, storage transaction, and signature in a wallet storage policy is embedded in the blockchain. Through this, a network becomes a vault.
Qredo network is a two-blockchain agnostic layer. It runs on different blockchains as a side chain. On the distributed ledger, ownership of layer one digital assets is recorded and synthetic token or wallet combination represents it. A corresponding synthetic wallet or token pair is created once an L1 deposit is received.
Qredo network is a regulatory complaint crypto platform that boasts many capabilities. Some of them are as follows:
- Consensus driven Multi-party computations
- Decentralized custody and compliance automation
- Fast finality transactions
- Cross-chain swaps
- Liquidity hub
- Block-chains having interoperability
- Secrecy and transaction security
- End-to-end encrypted messaging with layer three decentralized
It may seem that the withdrawal of digital assets to a wallet is a simple task just like a fund manager but it is not so a straightforward task. To hold customer assets above the amount of fifteen thousand dollars, institution-grade investors are required by law with a qualified custodian. The question arises that whether these qualified custodians are immune to risk vectors, regulatory compliance, insurance, and new-concern transparency, They are accountable to the individuals they are investing in on their behalf.
Crypto-custody providers employ different strategies to surmount these challenges. They retain a largely centralized database for declaration of asset ownership. Hackers looking to exploit potential vulnerabilities can easily target the database. The asset ownership data is neither immutably recorded nor decentralized. Decentralized custody is a necessity that employs blockchain technology to immutably store asset ownership data. It ensures the secure custody of digital assets.
Various projects adopt the adaptations of zero-knowledge proof which is not a novel technology within block-chain space. It is done so to securely verify the data without divulging the data itself. Each crypto wallet contains a public and a private key. Any digital asset stored in the private key of any wallet is when compromised is as good as lost. Public key helps in encrypting a wallet and allows the users to receive digital assets to their wallet. The wallet is a kind of account number. On the other hand, a private key decrypts the wallet and signs transactions from any given wallet. The loss of digital assets due to security breaches might be an impossibility if there was a way of securely effecting transactions without using private keys.
MPC or multi-party computation enables the multiple parties to evaluate computation without revealing any private data to compute parties. This allows for transactions and eliminates the only possible attack vector that might exist in a decentralized custody model. This all is done without the need for private keys. Qredo network has been created as an advancement of the existing platform and creates an opportunity to adopt the decentralized model. It is not a competitor for existing centralized crypto-custody platforms.
Combining MPC and decentralized custody
There are various crypto-custody service providers associated with employing MPC (Multi-party computation). The cross-chain transactions enable the seamless exchange of values across the different chains. Being the first crypto-custody platform, the Qredo network brings decentralization to crypto-custody. It implements cross-chain transactions and CS MPC (Consensus-Driven Multi-Party Computations).
Qredo network is built using Tendermint and is a layer-two blockchain infrastructure. It has been designed to ensure the secure custody of digital assets and onboard institutional-grade investors from TradFi to DeFi space. Qredo creates a more secure network that operates without the need for private keys and essentially makes the network a vault!
It is not possible to accurately estimate the potential of Qredo Network as it is the pioneer of decentralized custody. Qredo Network will be a commendable force within the crypto-custody and blockchain space in general. It can be seen from its strategic partnerships and investors. Comparison with crypto-custody platforms and cross-chain protocols easily provide a short-term estimation of the potential of the Qredo network in terms of market capitalization.