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Battle of wallets: Multi-sig vs MPC wallet - What’s best for your business and how to use them

mpc vs multi-sig wallets: how can CFOs decide? Here is a practical summary of some key differences between the two types of wallets.

June 13, 2023

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Securing treasury and funds has never been greater in the fast-evolving world of cryptocurrencies and digital assets. There’s an increasing need for robust wallet solutions to safeguard your organization's digital assets effectively. 

In this article, we delve into the fascinating realm of Multisignature (Multi-sig) and Multi-Party Computation (MPC) wallets, two cutting-edge technologies designed to enhance security and mitigate the risks of holding cryptocurrencies. In the past, traditional single-key wallets have been the norm, leaving the responsibility of securing the private key solely in the hands of a single individual. However, with the rising threat of hacks, theft, and unauthorized access, Multi-sig and MPC wallets have emerged as game-changers, offering more resilient solutions.

Multi-sig and MPC wallets have unique strengths and considerations, making it essential for financial managers and CFOs to understand their differences and choose the right option for their organizations.

Discover the optimal path to safeguarding your crypto treasury while maintaining control and peace of mind.

What is a Multi-sig wallet?

As the name suggests, multi-sig wallets rely on multiple signatures to authorize transactions. These wallets require the participation of multiple individuals or entities, typically using a predetermined number of signatories before a transaction can be executed. This added layer of security protects against unauthorized transactions and reduces the risk of a single point of failure.

What is an mpc wallet?

On the other hand, MPC wallets utilize advanced cryptographic techniques to distribute the private key across multiple parties. Rather than relying on a single person or device to possess the complete key, MPC technology splits the key into multiple shares. It distributes them among participants to prevent any individual from having access to the full key. This collaborative approach significantly enhances security while maintaining usability and accessibility.

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Mpc vs Multi-sig - A comprehensive comparison 

A multi-sig or MPC wallet will likely represent the tradeoffs between security and useability for most organizations

MPC wallets utilize cryptographic algorithms that divide private keys into multiple shares, distributed amongst various parties. The beauty of this approach lies in the fact that transactions can be authorized without ever reconstructing the entire private key, thus enhancing security against single points of failure. MPC also provides greater flexibility since it allows for customizable policy enforcement, such as the number of participants required to approve a transaction. This makes MPC attractive for businesses prioritizing advanced security and flexible, policy-driven controls.

On the other hand, multi-sig wallets require multiple signatures for a transaction to be authorized, acting as a check-and-balance system. The number of required signatures is predetermined and typically static. Multi-sig wallets are simple, effective, and have been battle-tested in the blockchain space, making them a reliable option for companies that value tried-and-true mechanisms.

Now to help you decide between the two, we have prepared this comprehensive comparative table where you can identify the pros and cons of each one:

How to use Multi-sig and MPC wallets with Request Finance

Using multi-sig or mpc wallets can greatly enhance the safety of your crypto treasury by avoiding the single point of failure. 

When processing payments, it is important to have that coverage, and because of that, Request Finance connects with multiple multi-sig and MPC wallets ensuring you can use the best one for your business. Check the full list of over 200 wallets Request Finance connects with here.

Request Finance and Fireblocks (MPC wallet)

Request Finance and Safe (Multi-Sig wallet)

As we navigate the intricate world of cryptocurrency and digital asset security, the decision between Multi-sig and MPC wallets emerges as pivotal. With their unique strengths and trade-offs, these advanced solutions offer greater security, flexibility, and control. This exploration of Multisig and MPC wallets, including their operational mechanisms, use cases, and practical applications via Request Finance, aims to empower you with the insights to choose the right wallet solution that aligns best with your business's security needs and strategic objectives. 

Remember, securing your digital assets does not have to be a complex endeavor. With the right tools, strategy, and understanding, you can confidently and confidently navigate this space. Your journey towards securing your organization's crypto treasury starts with choosing the right wallet – be it Multisig or MPC, the choice ultimately depends on your organization's unique needs and risk tolerance. Here's to your organization's secure and prosperous future in the crypto-sphere.

Remember! All the information in this article is for educational purposes only. You should not consider any such information as legal, tax, investment, trading, financial, or other advice. Always do your research!

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