The post Centralizing SaaS wallets: Killing autonomy for the sake of convenience? appeared on BitcoinEthereumNews.com.

Disclosure: The views and opinions expressed here belong solely to the author and do not represent the views and opinions of crypto.news’ editorial. Traditional software-as-a-service-based multi-party computation custodians are often seen as the “convenient” solution in the crypto universe, managing a staggering portion of decentralized assets. But the reality is that the convenience quickly wears off, revealing a host of limitations, unexpected risks, and challenges as you dive deeper into the technological aspects of protecting digital currency.  Regardless of your decentralization versus centralization stance, it is essential to recognize that the appearance of private key control can be skewered by a lack of control in policy governance and infrastructure you do not run yourself. The rise and risks of SaaS-based MPC wallets  The emergence of SaaS-based MPC wallets has significantly impacted the crypto landscape, allowing businesses to manage digital assets with convenience and perceived security. These wallets are typically provided by tech companies that are currently positioning themselves more and more as non-custodial service providers. However, despite this label, these solutions still require users to trust a centralized party to coordinate signing and key generation securely, placing them high on the custody spectrum in terms of control over assets.  This reliance on a centralized service provider creates a situation where control and security are not entirely in the hands of the institution using the service. While these tech providers do not operate as traditional third-party custodians, such as BitGo or Anchorage—highly regulated and offer fully managed custodial services—they still introduce a central point of control and potential vulnerability. As used by both SaaS-based providers and traditional custodians, MPC technology involves splitting cryptographic keys required for transactions into multiple parts distributed among various parties to enhance security.  However, in the case of SaaS-based solutions, the centralization of these services within a…

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Filed under: News - @ September 6, 2024 12:24 pm