Sovereignty. Control. Security. Three of the key tenets of crypto.
What crypto really provides for users is the ability to take total control over your assets and information, doing away with the need for a trusted third party or intermediary.
However, as the market has developed and more people have looked for ways to manage and transact their digital assets, more solutions have emerged to make that process easier.
In doing so, many users have, either by choice or inadvertently, sacrificed the fundamental control over their assets by leaving them under the stewardship of a third party which at the end of the day controls the keys to the assets.
Qredo is different. By using a unique implementation of decentralized multi-party computation, Qredo offers users a means of managing their keys and digital assets securely without compromising on the sovereignty and control that is fundamental to the technology.
But what is decentralized and traditional MPC and how does it work in practice?
Multi-party computation (MPC) is a cryptographic technique invented by Chinese computer scientist Andrew Yao in the 1980s.
The innovation is reflected in Yao’s “Millionaires' Problem”, which aims to solve the issue of two secretive wealthy individuals seeking to find out which is richer without divulging the exact amount of money that they have.
MPC works by using complex encryption to distribute computation efforts between multiple parties.
From anonymising buyers’ offers in Danish beet auctions to protecting sensitive medical information in large scale trials, MPC has evolved into a favored encryption technique of cryptoasset users seeking to protect their private keys.
By splitting the data across multiple nodes, the data is held in a more secure environment where no single stakeholder holds the keys to the system.
One of the major issues with cryptoasset security remains that of private keys, which if lost or compromised can open up assets to unknown third parties.
MPC instead uses Threshold Signature Schemes (TSS) to create and distribute independently held parts of a private key where no one single person controls the private key.
Qredo takes the concept one step further by distributing the control of the nodes on the network, decentralizing the MPC computation and ensuring that the sensitive key material is not under the control of any single entity.
Crypto is all about decentralization, with the promise that your coins will remain yours alone so long as you control the keys.
However, with most implementations of MPC ultimate control over your asset in the form of signing authority remains in the hands of a trusted third party, with the custodian or exchange holding the coins not much different to banks.
That’s why Qredo developed the concept of decentralized MPC (dMPC), to offer cryptoasset owners a truly independent and secure network on which assets can be held and traded without sacrificing the Satoshi Vision.
Decentralized MPC solves the twin issues of private key management and asset control by creating multiple independent secrets which are distributed between MPC Nodes on a fast-finality blockchain.
The information is stored in top-tier data centers in six financial hubs around the world, with each node independently generating its own secret key information and protected in secure environments.
The encryption is combined with Qredo’s Layer 2 blockchain, which facilitates control of access and instant settlement between network participants.
When Qredo Network is fully decentralized, this will mean that your assets will always be under your control, even if Qredo Ltd itself is in some way compromised.
With assets held by third parties such as exchanges, your assets can fall out of your control, for example if the exchange falls into bankruptcy proceedings.
Qredo’s approach eliminates that risk while providing world-class security and interoperability with other blockchains, all without sacrificing the fundamental principles of crypto.