As the Bitcoin halving event approaches, various speculations and analyses about the future trend of Bitcoin have emerged in the market. Historical data shows that Bitcoin halving often accompanies a price rise, triggering the so-called “halving bull market” effect. While discussing the impact of Bitcoin halving on the market, we should also pay attention to the issue of asset security, especially with the arrival of the bull market. MPC (Multi-Party Computation) wallets, as an emerging private key security technology, have increasingly highlighted their advantages and importance.
Firstly, let’s review the impact of Bitcoin halving on the market. Bitcoin halving is an intrinsic mechanism of the Bitcoin network, aimed at limiting the growth of Bitcoin’s total supply and ultimately reducing the issuance of new Bitcoins to 21 million. Approximately every four years, the Bitcoin mining reward is halved, reducing the supply of new Bitcoins, thereby increasing the scarcity of Bitcoin. Historical data shows that Bitcoin halving events often lead to price increases as investor confidence in the future value of Bitcoin strengthens, driving market demand and subsequently pushing up prices.
Bitcoin Having Effect
Bitcoin’s halving is considered a bull market signal, indicating a potential uptrend. The price increase after Bitcoin halving is called the “halving bull market” or “halving effect.”There are a few reasons why this happens:
Supply Reduction
Bitcoin halving means halving the Bitcoin rewards per mined block, reducing the supply of new Bitcoins. If demand remains unchanged or increases, a reduction in supply usually leads to price increases.
Perceived Scarcity
Bitcoin halving events are often seen as reminders of Bitcoin’s scarcity. With the decrease in supply, people may perceive Bitcoin as more scarce, thereby increasing its value.
Market Psychology
The Bitcoin community is unanimous that Bitcoin halving will drive price increases. This consensus may influence investor behavior, as they may buy Bitcoin before or after the halving event, driving up prices.
However, with the arrival of the bull market, we need to pay more attention to asset security issues. In the world of crypto assets, private key security is crucial, as the leakage or loss of private keys may result in permanent asset loss. In this context, MPC wallets, an emerging private key security technology, have attracted attention.
MPC for Large Financial Institutions
Earlier, we mentioned that HyperBC provides a safe TSS environment for an enterprise-level MPC custody solution for assets. So, what are the unique features of MPC technology for large-scale asset custody?
Enhanced Operational Flexibility
As large-scale asset custody institutions evolve, their business needs may change continuously, requiring adjustments to access and transfer digital assets. Traditional multi-signature wallets often limit this flexibility, making it easier to adjust once set up. MPC wallets, on the other hand, enable continuous modification and maintenance of signature schemes, allowing custody institutions to easily adjust signature schemes, add new key shares, or revoke key shares when employees leave without creating new wallets or transferring assets, greatly simplifying operational processes.
Reduced Transaction Costs
Frequent trading is commonplace for large-scale asset custody institutions. Traditional multi-signature wallets may incur high transaction costs, while MPC wallets present a single wallet address on the blockchain. The actual distributed signature calculation happens off-chain, significantly reducing transaction costs and saving custody institutions money.
Hidden Signatures and Off-Chain Accountability
Privacy and security are crucial considerations for large-scale asset custody institutions. Traditional multi-signature wallets may transparently expose signature schemes and workflows on-chain, posing security risks. MPC technology, however, provides:
- Hidden signatures and off-chain accountability
- Allowing each co-signer to audit the keys involved in signing without exposing them externally
- Protecting the privacy and security of custody institutions
Enhanced Hardware Isolation
Hardware Security Modules (HSMs) are crucial for protecting cryptographic materials in case of system compromise. More than relying on HSMs is required to provide the best private key security solution; similarly, relying solely on MPC is only part of the solution. Therefore, it is crucial to emphasize that combining MPC and hardware isolation systems (such as HSMs) is essential, as relying solely on HSMs only guarantees a part of security.
Furthermore, there is a problem with implementing HSMs: attackers may empty wallets if authentication tokens or HSM clients are compromised. This can be achieved simply by compromising the client’s credentials or transaction generation code, which are not inside the HSM. To address this, HyperBC distributes all its MPC critical materials between hardware-isolated servers enabled by Intel SGX technology (Intel’s secure enclave) and mobile device secure enclaves (TEE). The execution of MPC algorithms and policy engines is implemented inside secure enclaves, preventing malicious external and internal actors from modifying execution or policy engines, thereby enhancing the security of assets.
Bitcoin halving may not only lead to the onset of a bull market but also remind us to prioritize asset security. In this process, MPC wallets, an emerging private key security technology, provide institutions managing cryptocurrency with a more secure and flexible solution. With the continuous development of the cryptocurrency market, adopting MPC wallet technology will be one important measure to safeguard asset security.
About HyperBC
HyperBC stands as a market leader in digital asset custody and payment solutions. Catering to businesses seeking a secure and efficient transition to Web3 transformation, ensuring the security of assets and We are committed to the mission of “ fostering financial freedom.” In line with this objective, we provide asset owners with a complete range of services, encompassing asset custody, merchant payments, clearing and other financial services.
