What is Multi-Party Computation (MPC)?

Multi-Party Computation (MPC) is a research method within cryptography that allows to compile the data of multiple parties and compute it while maintaining the anonymity of each participant’s data.

MPCs allow conducting joint analysis of specific data and keeping said data unknown.

When it comes to the crypto sector, MPC is applied in the blockchain as a means to maintain each participant’s personal and sensitive data hidden while successfully completing the transaction.

Let’s have a look at an example. When stakeholders want to be aware of the average salary within the company, MPC is one of the most optimal methods to calculate it. By using multi-party computation, the company will preserve the private salary of each party.

MPC makes use of the additive secret sharing method - dividing a specific secret into shares and then distributing these shares to a group of participants. 

MPCs are also utilized within the public key cryptography and encryption.

For instance, DeFi enables multiple parties to distribute and manage fragments of a public key. It’s a way of adding another layer of security.

When it comes to the MPC method, the mentioned keys are also divided. However, every key fragment must be present in order to be granted access. 

Cryptocurrency transactions can be verified by each party generating a digital signature by utilizing private keys. Once it’s established that each party of the MPC group is legitimate, every participant would be granted one of the generated signatures thus guaranteeing that the operation is secure.