Before we can understand how cryptography works to protect our assets, we need to understand how it works. The biggest factor that makes cryptography so valuable is that it allows digital asset transactions to process and be verified without the need for another third party. Chances are you’re familiar with cryptocurrency in some form, but probably not as familiar with cryptography. The crypto in cryptocurrency comes from the crypto in cryptography, which is all about how the information is sent and stored. There are three main types of cryptography, symmetric encryption, asymmetric encryption and hash functions. Each of the three have their own pros and cons, and suit a particular use. Cryptography has been traced back to Egyptian times, and used throughout history to send discrete messages in various ways. However with assets moving online, it’s found a lot of use and relevance for keeping our assets safe.
MPC crypto or multi-party computation allows many different parties to evaluate a transaction without the individuals having to share any of their private information. This is the foundation that allows crypto wallets to function and for transactions to be sent between wallets without compromising security. To use digital assets you need two keys – first a private key that isn’t shared with anyone else and is your way to access your wallets. You also need a secondary key which is a public wallet address. As long as your private key is kept safe and not compromised, your assets will be safe and inaccessible to anyone else despite your transactions being shared on a network. For this reason, preventing theft of private keys and keeping them safe is an integral part of digital asset security.
There are a few options for storing keys with the top three options being a hardware wallet, hot storage which is holding the key online, and cold storage which is storing the key offline. As your digital assets grow, you’ll probably find it more valuable to invest in a hardware wallet as it provides an extra level of security. If you happen to lose your wallet, as long as you have your seed phrase hidden somewhere, you’ll always be able to access it. Once your assets reach a certain value you may even find it helpful to implement the help of a financial institution to help you manage their security in the long run.
The Gold Standard of Crypto Storage
MPC is the gold standard for storing digital assets. Many major financial institutions around the world have moved to MPC, allowing their users to have confidence in their digital asset security. MPC is often combined with other types of security, to create a multilayer defense system, which means that in case one layer is somehow breached, there are still numerous layers providing information security and keeping your assets safe.
Your digital assets are an important asset and knowing more about methods for best storing them and protecting them can help ensure you keep them safe.