4.1.1 Private Key Sharding
Private Key Sharding as an Alternative to Multi-Signature for a Decentralized and More Secure Witness Mechanism
Last updated
Private Key Sharding as an Alternative to Multi-Signature for a Decentralized and More Secure Witness Mechanism
Last updated
Regarding the two-way peg asset mechanism, there are two main technical implementation paths: the multi-signature mechanism and the private key sharding mechanism. Each of these two mechanisms has its own advantages and disadvantages. SATPORT has chosen the private key sharding solution, which offers higher levels of security, flexibility, and resistance to single points of failure. This approach leverages a combination of Multi-Party Computation (MPC) and Threshold Signature Scheme (TSS) to achieve a fully decentralized transaction signature management system.
The multi-signature witness mechanism is associated with limitations such as witness quantity restrictions, centralized permissioned admission, absence of clear incentive/ Slash mechanisms, and collusion risks.
Witness Quantity Restrictions: In non-Turing complete blockchains like Bitcoin, the multi-sig scheme is subject to limitations on the number of witnesses. Additionally, it lacks the capability to establish signature participant management rules through smart contracts. In the event of private key compromise or the need for a participant to exit, the only recourse is the reconstruction of a new multi-sig address.
Centralized Permissioned Admission: Current multi-sig schemes often rely on centralized witness admission mechanisms, as seen in examples like Liquidity and RSK, where witnesses are governed by a permissioned "reputation consortium." This arrangement significantly undermines the decentralized nature of the system.
Lack of Incentive/ Slash Mechanisms: Multi-sig witness mechanisms typically lack well-defined reward and punishment structures to incentivize honest behavior and deter malicious actions among witnesses. This absence fails to effectively curtail dishonest practices by witnesses.
Collusion Risk: Within the multi-sig scheme, witnesses possess the privilege to sign "peg-out" transactions, creating a potential risk of collusion. Covert collaboration among witnesses to endorse malicious "peg-out" transactions can directly lead to financial losses.
In response to the aforementioned challenges of the multi-signature witness mechanism, SATPORT adopts a private key sharding witness mechanism, which offers higher levels of security, flexibility, and decentralization.
Enhanced Security through Private Key Sharding: Private key sharding technology provides superior security compared to multi-signature solutions. Shards are continually refreshed, generating dynamic changes in each signer's private key shard. This effectively prevents single-point leaks that could lead to asset theft. Moreover, this mechanism eliminates the limitation on the number of witnesses, ensuring better scalability.
Permissionless Admission: SATPORT allows anyone to become a witness on the network without requiring permission. By staking native tokens, individuals can become witnesses dynamically, fostering a higher degree of decentralization within the witness set.
Clear Incentive/ Slash Mechanism: SATPORT has established explicit reward and punishment mechanisms for its witness set to incentivize honest signing behavior while penalizing malicious actions. This significantly reduces the risk of assets losses resulting from witnesses signing malicious "peg-out" transactions.
Reduced Collusion Risk: SATPORT mitigates collusion risk among witnesses by implementing a separation of powers mechanism. Successful execution of witness-signed "peg-out" transactions aligns with on-chain transactions initiated by users, considerably minimizing the likelihood of witness collusion.
Enhanced Scalability: SATPORT demonstrates superior scalability by enabling seamless cross-chain integration of assets from non-smart contract chains or non-EVM compatible chains such as DOGE, LTC, FLOW, SUI, and more onto the SATPORT Chain.
