HyperBC Supports Threshold Signature Ensuring the Security of Digital Assets
The emergence of various security breaches and exploits within cryptocurrency platforms during the early months of 2024 underscores the pressing need for heightened security measures and increased awareness within the dynamic and ever-evolving cryptocurrency industry. Ranging from the $10 million exploit on Prisma Finance to the $2.4 million loss experienced by Mozaic Finance and the mysterious disappearance of BitForex, which saw nearly $57 million withdrawn from its hot wallets, these occurrences highlight the ongoing threats faced by DeFi protocols and cryptocurrency exchanges. The importance of robust security protocols cannot be overstated as the digital asset ecosystem continues to attract growing attention and investment. These events serve as valuable lessons for the industry, emphasizing the urgent need for proactive measures to mitigate risks and safeguard users’ funds against malicious actors and vulnerabilities.
Entering the Web3 world necessitates owning a wallet to manage personal encrypted assets. However, wallet management today has its challenges, with frequent incidents of asset theft affecting wallet private keys.
Private keys are akin to keys to a safe left on the street; once in the hands of a thief, assets are at risk of being stolen. Protecting wallet private keys has become a topic of considerable concern. However, existing methods of private key management often need to be revised for new users, making them susceptible to deception upon entering the blockchain industry. To address this critical issue, HyperBC has introduced a wallet architecture based on threshold signature technology aimed at helping users better protect their digital assets.
What is a Threshold Signature?
Blockchain technology and signature algorithms are closely intertwined, with the security, efficiency, and circulation of signature algorithms directly impacting the characteristics and stability of blockchain networks. The growing demand from individuals and institutions for account key management has led to a series of related applications. For users, managing signatures is essentially managing keys. In the case of multiple chains, there may be better choices than traditional multi-signature technology due to its high cost and security risks. In addition to multi-signature technology, threshold signature technology has gradually emerged as an essential consensus tool.
The threshold signature scheme (TSS) is an essential branch of digital signatures. It is a cryptographic technology based on secure multiparty computation (MPC) and an important research direction for MPC key management.
The characteristic of threshold signature is that the private key is never revealed. Instead, all participants work together to compute the public key corresponding to the complete private key. Each participant holds unique key shards, and it takes t participants (t ≤ n) to generate the signature corresponding to the complete private key. The MPC protocol ensures that these key shards can co-generate a valid signature without being fully assembled.
In other words, MPC offers a way to keep secret information private while still allowing multiple parties to collaborate on calculations. Instead of revealing their secrets to each other, participants jointly compute results. For example, when creating a secret key for a secure gate, rather than one person generating it alone, all participants contribute to its creation according to specified rules (like needing a certain number of signatures). To reconstruct the entire private key, you’d need at least a certain number of participants to collaborate. This setup means that even if someone tries to steal the private key, they’d have to target multiple participants to get enough key shards to reconstruct it. To further enhance security, participants can be required to refresh private key shards together at regular intervals, rendering old key shards invalid. This refresh mechanism effectively prevents attackers from stealing valid t private key shards. Because each time the private key shards are refreshed, attackers will have to start over, significantly increasing the difficulty of successful theft.
In integrating blockchain applications, the advantage of threshold signatures is that the generation of signatures is through off-chain MPC protocols, resulting in increased security and avoiding the risk of smart contract being hacked. Since threshold signatures operate independently of smart contracts, they can be verified without altering existing smart contract structures. In addition, the design strategy of smart contract can be more flexible, and do not need to consider the design of multiple signatures, which in turn puts the focus on developing business logic.
Another critical application scenario is key management. Based on MPC key management, keys can be securely stored and refreshed, and the loss of individual or small batches of fragments will not affect the security of the key; on the other hand, it enables individuals or enterprises to use keys more conveniently, securely, and by business logic.HyperBC adopts an MPC architecture based on the TSS framework to ensure the security and rationality of MPC key management.
Operability
Traditional asset management often relies on centralized custody, meaning further operations can usually be carried out with a single private key. However, this method poses a high risk because once malicious actors compromise or obtain the key, it severely threatens asset security. To mitigate this risk, HyperBC employs MPC technology to divide the private key into multiple shards and store them in different locations. This approach significantly reduces the operational risk of a single custody method because even if someone obtains one of the shards, they cannot fully control the entire private key. By dispersing the right to operate manually, enterprises can better control asset allocation and management, enhancing operational security and flexibility.
Real-time Performance
To further enhance the security of private key management, HyperBC adopts the measure of regularly updating private key shards. This means that private key shards will be updated and replaced regularly, ensuring that even if one shard is leaked, it will become invalid in the next update cycle. This scheduled update mechanism effectively enhances the real-time performance of the private key management system, providing users with a more reliable security guarantee.
Encryption
HyperBC collaborates with third-party institutions to entrust one of the encrypted private key shards to a trusted third-party security institution. Even if hackers ultimately obtain the encrypted private key shards, the high-strength encryption algorithm prevents hackers from decrypting the original private key shard. This secure encryption method offers users added confidence, guaranteeing that even under extreme circumstances, their assets remain well-protected.
HyperBC’s MPC architecture provides users with a more secure and reliable solution for digital asset management. By introducing TSS technology, we are committed to helping users better protect their digital assets and ensure their security and privacy. In the future, we will continue to improve our technology, constantly enhancing users’ experience in managing digital assets and helping users securely and reliably manage their assets in the Web3 world.
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.
