Stealth-mode crypto custody specialist Shard X has claimed a breakthrough, being the first company to successfully run math-heavy, multi-party computation (MPC) on hardware security modules (HSMs).

So why does this alphabet soup of security tech matter? 

Solving this problem is important because banks, which are gradually edging towards crypto custody, generally like and trust HSMs. So a combination of battle-tested, bank-grade HSMs, combined with cutting-edge MPC is probably the type of tech those institutions will be looking for, says Yaniv Neu-Ner, co-founder and CEO of Shard X. 

Shard X has successfully run MPC tests with Entrust, a provider of nShield HSMs to major custodians, said Neu-Ner, and is now working on running MPC with a number of firms offering HSMs, such as Utimaco.

There are a lot of smart people working on MPC, so how did nobody else solve this problem? 

Neu-Ner said the credit goes to his team, which managed to combine equally strong math and engineering backgrounds, in particular his CTO Nikita Lesnikov.

“[Lesnikov] is just an exceptional mind,” said Neu-Ner. “He was the one who figured it out. I imagine now that we are announcing it, the competition will start working on the same challenge, and I think they will get there. But it’s a big breakthrough to be first.”

“As this industry grows, there’s going to be more and more value at stake, and right now we are seeing exchanges getting hacked fairly regularly,” he said. “So I don’t think one technology will be enough. The future I see is that you combine multiple technologies to create the most secure custody solutions.”


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This Crypto Custody Breakthrough Will Bring Banks Closer to Digital Assets

by Mario Herndon
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