# The Future of Wallets: MPC vs Smart Wallets by Ivo Georgiev | Devcon Bogotá

- Speakers: [Ivo Georgiev](https://streameth.org/speakers/ivo-georgiev)
- Channel: [Devcon](https://streameth.org/devcon)
- Date: 2023-10-09
- Duration: 09:35
- Topics: Science & Technology
- Watch: https://streameth.org/watch/yt-85w0TvZMivA
- YouTube: https://www.youtube.com/watch?v=85w0TvZMivA

## Description

Visit the https://archive.devcon.org/ to gain access to the entire library of Devcon talks with the ease of filtering, playlists, personalized suggestions, decentralized access on Swarm, IPFS and more.
https://archive.devcon.org/archive/watch/6/the-future-of-wallets-mpc-vs-smart-wallets/

There's undoubtedly more we can do to improve Ethereum wallet UX, and there's two technologies competing for this: MPC (multi-party computation) and smart wallets.

Let's explore the relative strenghts and weaknesses of each, as well as the protocol upgrades that will help (eg account abstractions, EIP3074 and EIP4337) and how those affect the comparsion.

Speaker(s): Ivo Georgiev
Skill level: Intermediate
Track: Developer Infrastructure
Keywords: mpc,multi-party computation,ux,smart wallets

Follow us: https://twitter.com/efdevcon, https://twitter.com/ethereum
Learn more about devcon: https://www.devcon.org/
Learn more about ethereum: https://ethereum.org/ 

Devcon is the Ethereum conference for developers, researchers, thinkers, and makers. 
Devcon 6 was held in Bogotá, Colombia on Oct 11 - 14, 2022.
Devcon is organized and presented by the Ethereum Foundation, with the support of our sponsors. To find out more, please visit https://ethereum.foundation/

## Transcript

foreign [Music] and I'm the founder and CEO of Empire wallet and I'm going to tell you about the future of ethereum wallets and ethereum ux and two technologies are at the core of this and that's a smart contract wallets kind of also known as account obstructions and MPC otherwise known as smooth party computation and sometimes referred to as threshold signatures in this case the question is can self custody be the future for the next billion users how can we onboard the next billion users and there is a big myth in the space that most people are not ready for self-custody but the actual reality is that most self-custodial wallets are not ready for the users not the other way around uh and uh I'm guessing uh can I get a show of hands who saw the account obstruction panel yesterday with uh vitalik cool yeah um so you all know that sit phrases are absolutely terrible and there are an absolutely terrible way of um backing up your private key uh and we have so many problems in the industry with compromised Keys software wallets being vulnerable to malware and to come to supply chain attacks uh which is quite scary like a single npm Library can like completely wreck your wallet security and of course you know we have social engineering attacks like for example with board dapes and generally all of those things can be solved by multi-factor authentication and on on the Chain we call this multisigs and wire multi-6 kind of a silver bullet uh so first of all by having multiple Keys uh or you you can think of it as multiple shards of a single private key but it's actually multiple Keys um you can actually onboard users without making them write down a seed and without worrying that they would lose access to their account so basically a simple example would be uh to have a key on your laptop or ant on your phone you can also recover your account with methods like social recovery not Argent pioneered but there's also other ways of recovery you can also generally do multi-factor authentication which is way more secure and prevents you from malware and of course you have resistance to hacks and compromised keys for example we have malware on one of the devices you will not be that vulnerable so um there are two ways to achieve a multicycle on an evm chain uh one of them is smart contract wallets and a lot of you have heard about account obstructions and account obstructions are basically a way uh to pave the way forward for smart contract wallets but I prefer to call this like smart smart contract wallets I prefer to call all these Technologies smart contract wallets or smart wallets for short and this is basically where each account is a smart contract which allows for any custom execution logic including multi-6 of course and then MPC refers to multi-party computation and in the context of wallets it means that it allows you to have like threshold signatures so you can sign by the signature could be by multiple parties or you can do N Out of them so like two out of three and let's start by boosting some myths about smart wallets so one of them is that smart wallets cannot sign messages and I'm sure that many of you have heard that but the reality is that smartwatch can sign messages are just fine you just need a bit of custom Logic for verification which is the ip1271 then another one is that smart wallets and I've heard that in the past that they produce different address for each chain so it's kind of tough to use but that's not really true because you have create two now and you can create accounts counter factually at the same address on all evm chains again it was mentioned in the panel and then the other one is the gas overhead gas overhead still exists but it's got on a lot less in the last years again thanks to thanks to proxies minimal proxies and thanks to counter factual deployment unlike NPC smart worlds can do many more things than just multi-6 they can do time logs they can do spending limits again something that was fantastically covered on the panel and this also allows for Recovery mechanisms like social recovery and for example seedless onboarding like we have on our buyer wallet just with an email and a password while not compromising non-custodial nature of the wallet it's also mutable which means that you can change the authentication scheme like you can start with with seedless onboarding account where you have an email and a password and then also become more versed in crypto you can upgrade this to a dresser or a ledger and you can you can set the Tracer and The Ledger to be like the sole owner of the account without changing the address without having to move funds which is amazing then you have gas obstructions which allows which allow you to pay for transactions and stable coins so like if you're a new user on boarding on crypto to crypto you can sign up with an email and a password then fund your account with an on-ramp and then you would receive usdt and you will be able to swap that for example for Rita without having either for gas and of course you can batch transactions so do multiple things in in one transaction again a fantastic example from Argent was the nft shopping cart but a simple example would be on uni swap when you have an approval the approval would get batched together with with transaction so you wouldn't have to do it separately and there are more exotic use cases like for example custom cryptography like enabling the nist curve which would allow using iOS Biometrics and web authentication um and there are there are of course some drawbacks of smart wallets and some adoption challenges like you have gas overhead as mentioned as mentioned previously it's not so much as people think you just have around one to two thousand gas per transaction and around forty thousand gas for deployment which is added to your first transaction but the main challenge is DAP adoption so a lot of Dubs either block smart contracts intentionally because they believe that that's not a wallet and it's some sort of automation that's basically what nft means and the other thing is many dabs just don't Implement smart contract signing but this is quite easy to fix so when would you want to use MPC wallets so one of the benefits of NPC wallets is off chain recovery which is cheaper and easier but not as flexible then the other thing is they're truly cross chains so there's no dependence on Smart contracts so for example you can support Bitcoin or you can support basically any chain that uses elliptical signatures there's no gas overhead and there's no kind of drama with the signatures like signatures just work with any dab but there are some problems with MPC and one of those is that they require custom cryptography and there are not that many libraries so far and they're not that well battle tested as normal electrical signature libraries and it's kind of an experimental technology but then the main problem I think is the immutable authentication rules which basically means that when you create like for example two out of three multisig you cannot just swap out one of the signers you cannot make it like two out of four or you cannot make it like a three out of four it's just immutable once you create it that's it which also creates some problems with recovery right so you can recover the account once but then you can change one of the keys so like if you lost the key then it's kind of bad um and it's also limited to multi6 you don't have time logs so that a lot that limits you a lot as well there's no gas obstructions but that's not in the slide because it's more of a benefit of smart contract wallets and finally the also a very big thing you cannot use it with a hardware wallet at least not before those Hardware wallets recommend that of course you can argue that you can pull requests to those Hardware wallets but at the moment you can't and as a conclusion I would say that smart contracts and account obstructions are the way to go uh does the future proof way of doing accounts on ethereum and on other evm chains on layer tools and Etc but mood Parts computation can be fantastic for like some temporary use cases before dubs kind of get their stuff together um but yeah definitely smart contract wallets are way better for the future so that's it so one of the critiques for the smart contract wallets right now is that in the end you still need a wallet with a private key to manage it yeah yeah both in Taos and multi-six so how do I mean any any ideas of how of how to overcome it well that's completely true but like on a fundamental level you cannot get away from the secret right in any form of authentication you have some sort of a secret just the great thing about smart contract wallets is that you can manage it and you can make it work not like as a single private key which is like the source of our authentication and like the one true point of authentication but you can have multiple of those Secrets like a regular uh like like you have on for example on Google or on Facebook or on regular like human friendly uh authentication scheme so it is a private key but you shouldn't think of it as a private key because eoa wallets they're the private Keys King is like the single secret number where everything comes from unlike smart contract wallets