Let’s talk Wallets
Hot wallets:
Hot wallets are connected to the internet and are intended for day-to-day transactions. They are convenient and easy to use, but also less secure than other types of wallets as they are more vulnerable to hacking attacks. Examples of hot wallets include mobile wallets, desktop wallets, and web wallets.
Cold wallets:
Cold wallets are not connected to the internet and are designed for long-term storage of cryptocurrency. They offer a high level of security as they are less susceptible to hacking attacks, but they can be more difficult to set up and use. Examples of cold wallets include hardware wallets, paper wallets, and USB drives.
Software wallets:
Software wallets are digital wallets that are stored on a computer, smartphone, or other device. They offer a good balance between security and convenience, but are less secure than hardware wallets as they are vulnerable to malware and other cyber threats. Examples of software wallets include desktop wallets, mobile wallets, and web wallets.
Paper wallets:
Paper wallets are a type of cold wallet that store cryptocurrency offline on a piece of paper. They offer a high level of security as they are not susceptible to hacking attacks, but they can be more difficult to use and may be subject to physical damage or loss.
Disclaimer - If you do paper wallet wrong it can be hacked!
How To Make a Crypto Paper Wallet | Gemini
Exchange wallets:
Exchange wallets are digital wallets that are provided by cryptocurrency exchanges. They are convenient as they allow users to buy, sell, and store cryptocurrency on the same platform, but they are less secure than other types of wallets as they are vulnerable to hacking attacks and may not offer the same level of control over your private keys as other types of wallets.
Further Reading on Wallets:
https://www.blockchain-council.org/blockchain/types-of-crypto-wallets-explained/
Multisig Wallet
A multi-signature (multisig) wallet is a type of cryptocurrency wallet that requires more than one signature or approval to authorize a transaction. This means that a transaction cannot be executed without the approval of multiple parties, making it more secure than a traditional single-signature wallet.
In a multisig wallet, the private keys are divided among multiple individuals, each of whom must provide their signature before a transaction can be executed. This means that in order to steal funds from a multisig wallet, an attacker would need to compromise multiple private keys, making it much more difficult to steal funds.
Multisig wallets are commonly used in corporate or institutional settings where multiple people need to approve transactions, or in scenarios where multiple individuals need to hold a shared wallet. They are also used for security purposes, as they offer a higher level of protection against theft or loss of funds.
There are several different types of multisig wallets, including 2-of-2, 2-of-3, and 3-of-3, each with its own requirements for transaction approval. It is important to carefully consider the requirements of a multisig wallet before setting one up, and to ensure that the necessary individuals have access to the private keys and are able to approve transactions when needed.
MPC
MPC stands for Multi-Party Computation. It's a type of cryptographic technology that enables multiple parties to jointly compute a function over their inputs without revealing those inputs to each other.
The main advantage of MPC is that it allows for secure computation, even in cases where some of the parties involved might not be trustworthy. This makes it useful for scenarios where multiple parties need to work together on a task, but do not trust each other with sensitive information.
Examples of MPC applications include secure voting systems, secure data sharing, secure multi-party machine learning, and secure multiparty contract execution. In these cases, MPC can be used to ensure that sensitive information remains confidential while still allowing multiple parties to work together on a task.
MPC is a complex technology and requires specialized expertise to implement. However, it has the potential to be a powerful tool for solving problems that require secure cooperation between multiple parties.
What is the difference between MPC and Multisig?
Multisig and MPC (Multi-Party Computation) are two different technologies used for different purposes.
Multisig, or multi-signature, is a technology used for secure cryptocurrency transactions. It requires multiple signatures, or approvals, from different individuals in order to authorize a transaction. This means that multiple individuals must agree to a transaction before it can be executed, providing a higher level of security against theft or unauthorized transactions.
MPC, on the other hand, is a cryptographic technology that enables multiple parties to jointly compute a function over their inputs without revealing those inputs to each other. It allows multiple parties to work together on a task while maintaining the privacy of their individual inputs. MPC is used in scenarios where multiple parties need to work together on a task, but do not trust each other with sensitive information.
In summary, multisig is used for secure transactions, while MPC is used for secure computation. They are two different technologies with different purposes, but they can both be used to enhance security and privacy in different ways.
Sources
Ledger: Which Crypto wallet is the best
https://www.ledger.com/academy/basic-basics/owning-and-using-it/how-to-choose-your-hardware-wallet
Trezor: Security best practices
