Binance CEO: New Open-Source Wallet Solution Will “Reshape the Landscape” of Custodial Services

Changpeng Zhao, the CEO of Binance, is known for making big strides in the cryptocurrency industry, and he seems to have a lot of faith in their new solution available to wallet providers and custodians. In fact, CZ states that the open-sourced option is “far superior” to the multi-sig security presently offered by many custodians, and he believes that its introduction will reshape the entire industry.

I believe TSS (threshold signatures scheme) will reshape the landscape for wallets and custodian services. It is far superior to multi-sig.

To that end, here is our little contribution from @binance, an open-source TSS library. Enjoy! https://t.co/Lx49q8tVb9

— CZ Binance (@cz_binance) November 6, 2019

The Threshold Signature Scheme (TSS) library for Elliptic Curve Digital Signature Algorithm (ECDSA), which was just released today, is openly-sourced. Basically, this cryptographic protocol is used for distributed key generation and signing, providing a way to avoid single points of failure in private keys for wallet providers and custodians.

The exchange explained the process a little more clearly, stating, “TSS allows users to define a flexible threshold policy. TSS technology allows us to replace all signing commands with distributed computations so that the private key is no longer a single point of failure. For example, each of three users could receive a share of the private signing key, and in order to sign a transaction, at least two of the three users will need to join to construct the signature.”

To use less resources and reduce the possible attack opportunities, TSS is used off-chain. Multi-signature protection is the opposite. With the threshold signatures, Binance states that a user’s assets won’t be at risk, even with a compromised device. The protocol helps with access control policies for business operators, protecting their corporate funds from being stolen by either insiders or outsiders. The Binance Academy has more information about TSS technology, and the open-source code can be found at GitHub.

To ensure that the coding is secure, Binance procured Kudelski Security for a third-party audit.  The cybersecurity solutions provider discovered “none of the issues found in the frame of this audit could be exploited” to “completely break the security of the scheme or recover secret data.”

Earlier this year, Kudelski partnered with Hosho, a smart contract auditing firm, allowing the two companies to combine their own skill sets to meet the needs of the blockchain industry.