Coinbase Simplifies Onboarding Process for Web3 with MPC Technology
Coinbase is taking steps to streamline the onboarding process for web3 and improve security and recovery for crypto wallets. By implementing Multi-Party Computation (MPC), Coinbase aims to overcome key management challenges that have hindered mainstream adoption of web3.
Key Points:
- MPC allows multiple parties to compute a function on their private inputs while maintaining confidentiality
- By requiring at least two participants to create valid signatures, MPC enhances the security of wallet private keys
- Individual key shares are distributed among participants, reducing the risk of wallet break-ins
- Chainanalysis estimates that 20% of bitcoin tokens, worth over $100 billion, are lost due to key mismanagement
- Coinbase’s use of MPC technology addresses key workflows: key generation, signing, and backup/recovery
Coinbase recognizes the need for secure yet recoverable private keys to drive web3 adoption. Traditional web3 wallets lack reset or recovery options, meaning a lost private key results in permanent loss of funds. MPC technology allows for distributed key control, offering stronger security and more reliable key recovery.
Through the use of MPC, Coinbase is revolutionizing the wallet experience. Users can choose from various backup options, such as cloud, local, and hardware backups, which provide faster recovery and offline access to wallets. Coinbase Wallet-as-a-Service (WaaS) ensures the encryption key is split between the user and Coinbase, allowing for wallet access while preserving privacy and legal identity.
With a focus on expanding the reach of web3, Coinbase is committed to simplifying crypto transactions and dapp interactions. The company is developing products for developers and users, including a new SDK for native apps to connect with Coinbase Wallet and an open dapp marketplace accessible without a Coinbase account.
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