Abstract
Ensuring safe custody of crypto-assets, while at the same time allowing a user to easily access and transfer them, is one of the biggest challenges of this nascent industry. This is even harder considering also the multiple technological implementations behind each crypto-asset. Here we present a survey of the various solutions for this custody problem, comparing advantages and disadvantages. Then we delve deeper into some interesting schemes based on secure multiparty computation, which give a blockchain-agnostic solution that balances security, safety, and transactional ease of use, and in particular, a protocol that enhances practicality by exploiting a party that may stay offline during the key generation.
Highlights
Custody of crypto-assets, such as cryptocurrencies, is at the very core of the burgeoning digital-asset market
This kind of solution addresses more comprehensively the problems above. It relies on three private keys, instead of a single one, which are distributed among three parties, and two of them are required to transfer the crypto-assets
In order to better cope with the medium’s durability, there are kits to engrave the wallet’s seed in titanium or steel plates, greatly increasing its safety. Interest in this type of solutions has rekindled, for example with the work [14] of Charles Hoskinson, CEO of IOHK and founder of the Cardano blockchain (ADA), who has devised a complex system in which the paper wallet features the private key in encrypted form and is unlocked using a YubiKey [15], a hardware device used for multi-factor authentication
Summary
Custody of crypto-assets, such as cryptocurrencies, is at the very core of the burgeoning digital-asset market. This kind of solution addresses more comprehensively the problems above. It relies on three private keys, instead of a single one, which are distributed among three parties, and two of them are required to transfer the crypto-assets. This approach is resilient with respect to the unavailability of one party. This solution is effectively agnostic to the underlying blockchain, i.e., it does not have to be supported by special features
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