Advanced cryptographic systems like Multi-Party Computation (MPC) promise elegant solutions to complex security problems. Cryptography is essential. Every modern system already relies on it through authentication systems, TLS in browsers, disk and database encryption, and APIs connecting services. This means every organization is, by necessity, in the key-management business, whether they recognize it or not.
However, MPC’s mathematical guarantees, like other cryptographic systems, depend entirely on operational security foundations that are often overlooked. This post uses MPC to illustrate a critical principle: cryptographic sophistication cannot compensate for operational weaknesses.
Achieving technical distribution without operational segmentation provides only the illusion of improved security.
I argue for an “outside-in” security model that prioritizes foundational defenses before investing in protection against exotic threats. The trick of course, is understanding which threats are exotic and which are impending threats. The result is a framework for rational security resource allocation that prevents expensive technology deployments from becoming elaborate security theater.
1. The Endless Security Regression
The fundamental flaw becomes apparent when you trace through an actual MPC deployment. You start with elegant mathematics that promise no single party can reconstruct the private key. Then you discover the operational reality.
The MPC shard itself needs protection, so you encrypt it with a key stored in a TPM. But TPMs only protect keys at rest. Once loaded into memory for computation, they’re vulnerable. So you add a Trusted Execution Environment to protect data in use. But TEEs have their own vulnerabilities: sophisticated side-channel attacks that can extract secrets from supposedly secure enclaves.
To mitigate side channels, you need dedicated hardware, but then you’re vulnerable to cloud operators who can access hypervisor memory. So you implement hardware attestation to prove your code is running correctly, but now those attestation keys need protection. You need PKI certificates for network identity, which require their own private keys, leading you back to key management systems.
At every layer, the “solution” creates new secrets that need the same level of protection you originally sought to avoid. You trade software vulnerabilities for hardware vulnerabilities, single keys for multiple keys, simple operational procedures for complex distributed protocols. Each mitigation introduces new attack surfaces that are often more subtle and harder to audit than the original problem.
If one person, team, or organization ultimately controls all these layers (generates the keys, manages the TPMs, configures the TEEs, handles the attestation, administers the network) then you’ve built an elaborate system that provides no meaningful security improvement over a single well-protected key. The supposed “distribution” of trust is purely technical theater.
Most MPC deployments are expensive ways to do what a simple, well-secured key could accomplish with far less complexity and operational overhead.
2. We Don’t Hack Crypto, We Hack How It’s Used
Government cybersecurity agencies understand this principle. The NSA explicitly states about Quantum Key Distribution: “NSA does not support the usage of QKD or QC to protect communications in National Security Systems” because “security of QKD and QC is highly implementation-dependent rather than assured by laws of physics.”
The UK’s National Cyber Security Centre takes the same position: “it does not endorse its use in government or military systems and cautions against its sole reliance on networks used by critical infrastructure.” These agencies aren’t anti-cryptography—they understand that mathematical guarantees mean nothing without operational security.
The overwhelming majority of security breaches don’t involve breaking cryptographic protocols. Attackers exploit implementation bugs, misconfigured systems, stolen credentials, supply chain compromises, and human error. Advanced cryptographic systems don’t address any of these attack vectors. Instead, they add layers of complexity that create new opportunities for the same fundamental failure modes.
This confirms the central truth: we don’t hack cryptography; we hack the way cryptography is used. The attack surface doesn’t disappear with sophisticated protocols—it shifts to deeper, more subtle layers that are often harder to audit and secure.
3. The Resource Allocation Problem
Security budgets are finite. Every dollar spent hardening against sophisticated threats is a dollar not spent on measures with demonstrably higher expected returns. The ROI calculation is stark: comprehensive code reviews catch implementation bugs that affect every user, penetration testing finds configuration errors that expose entire systems, security training prevents social engineering attacks that bypass all technical controls.
Organizations consistently invert this priority structure. They deploy MPC to protect against collusion while their systems remain vulnerable to SQL injection. They implement complex attestation protocols while using default passwords. They build elaborate key distribution systems while running unpatched software.
This represents a fundamental misunderstanding of threat modeling. Academic cryptography promotes an “inside-out” security model that begins with exotic threats: compromised hypervisors, malicious hardware manufacturers, nation-state attacks on protocols. This model assumes foundational security problems are already solved.
Operational security requires an “outside-in” approach. Master comprehensive code security first. Establish robust access control with mandatory multi-factor authentication. Implement secure operational procedures for deployment and monitoring. Verify the integrity of the entire supply chain. Only after demonstrating mastery of these fundamentals does it become rational to invest in protection against sophisticated internal threats.
4. When Administrative Segmentation Actually Works
This principle of aligning cryptographic technology with operational structure is not unique to MPC. For decades, mature security programs have used dedicated hardware to achieve the same goal. A Hardware Security Module (HSM), for example, provides its greatest value not just as tamper-resistant hardware, but as a tool to enforce separation of duties.
In a robust deployment, the team managing the HSM is organizationally separate from the team developing the application that uses it. Application developers can request cryptographic operations, but they cannot access key material or manage the HSM’s lifecycle. This creates two distinct operational domains, forcing an attacker to compromise both the application and the separate, hardened security team to exfiltrate a key.
Multi-Party Computation should be viewed through the same lens. It is a powerful cryptographic tool for achieving the same end goal: creating separate, non-colluding operational domains. The mathematical distribution of key shares is the technical mechanism, but the resulting security value is only realized when that distribution is mirrored by genuine administrative and organizational independence. Like an HSM managed by a single administrator, an MPC network controlled by a single entity becomes an exercise in costly ceremony, not a meaningful transfer of risk.
It’s important to acknowledge that the “outside-in” prioritization model must be adapted for specialized providers. For a custodian of high-value digital assets, for instance, insider collusion and key exfiltration represent the primary existential risks, justifying an intense focus on internal threats. However, this is where the conflict between security and complexity becomes most acute. Even for these organizations, each layer of cryptographic defense adds operational intricacy and new, subtle attack surfaces. This reinforces the core thesis: the goal is not merely to layer technology, but to achieve genuine, independent operational segmentation, which remains the most effective defense against those very insider threats.
A common misapplication attempts to create segmentation for a single user by distributing key shares across their personal devices, such as a laptop and mobile phone. The stated goal is to mitigate device compromise threats. While this approach provides technical and physical separation that raises the bar for attackers, it fails to solve the underlying administrative domain problem. In this case, the domain is the single, fallible human user.
The security of the entire system still collapses to the judgment and security hygiene of one person. A sophisticated phishing campaign can compromise both devices, defeating the technical separation. This model trades a simple technical exploit for a more complex social engineering challenge, but it doesn’t achieve the resilient segmentation that comes from genuinely independent administrative control by different people or organizations.
Real value emerges when organizations delegate specific functions to genuinely independent third parties like specialized providers for KYC verification, account recovery services, or high-security operations that benefit from dedicated expertise. This is where MPC’s verifiability properties become a critical enabler. Cross-organizational collaborations work when participants have different incentive structures, operate under different regulatory constraints, and maintain separate operational procedures.
The critical question isn’t “Are the keys distributed?” but “Are the operational domains truly independent?” This requires different administrative control, different legal jurisdictions, different physical infrastructure, and different threat models. Without this genuine independence, MPC becomes expensive security theater.
MPC also enables unique capabilities that justify complexity when applied correctly. Beyond cryptographic key management, MPC provides genuine value for privacy-preserving collaboration across organizational boundaries. When genuinely distrustful parties need to compute insights from combined datasets, MPC offers capabilities impossible to achieve through traditional security models.
This principle of provable quorums extends to critical internal operations as well. For instance, in a software deployment system requiring M-of-N approvals, MPC can transform the process from one based on a trusted policy engine (like a source control platform) to one that is cryptographically provable, where the deployment signature itself is the non-repudiable proof that the quorum was met. Consider multiple hospitals training medical AI models without sharing patient data, or financial institutions collaborating on fraud detection models while keeping transaction data private. These scenarios involve genuinely independent organizations with different regulatory constraints, administrative controls, and operational procedures. The mathematical guarantees of MPC become meaningful when backed by operational realities that make collusion genuinely difficult.
In cryptographic applications, MPC is often deployed to protect keys from theft, but the real threat is typically unauthorized signing rather than key exfiltration. An attacker who can trick a system into signing a malicious transaction has achieved their goal without ever seeing the private key. This threat model actually supports our broader argument: the operational security around the signing process—authentication, authorization, audit trails—matters more than the mathematical distribution of the key material itself.
5. The Gap Between Mathematical and Operational Security
MPC sits alongside formal verification and transparency systems as technologies that can create false confidence when their theoretical strengths mask implementation weaknesses. A formally verified algorithm provides mathematical certainty about correctness, but this certainty becomes meaningless if the implementation contains bugs or operational security is weak.
Similarly, transparency systems can provide complete auditability while remaining fundamentally insecure. A transparent but insecure system allows everyone to watch the breach happen in real time. The visibility doesn’t create security.
MPC follows this pattern. Strong mathematical guarantees against collusion become meaningless if participants are vulnerable to simpler attacks. The verifiability that makes MPC compelling only matters if the systems performing computations are themselves trustworthy. Mathematical elegance doesn’t compensate for operational weaknesses.
This gap between theoretical and practical security explains why sophisticated attackers often ignore advanced cryptographic protections entirely. They find it easier to compromise endpoints, exploit implementation bugs, or target operational procedures than to break mathematical protocols.
6. Building Real Security Foundations
True security comes from systematically eliminating vulnerabilities in order of probability and impact. This requires disciplined resource allocation that resists the allure of sophisticated solutions until fundamentals are mastered.
The foundation must include comprehensive implementation security through rigorous code audits and secure development practices. Access control requires mandatory multi-factor authentication, least privilege principles, and robust identity management. Operational security demands secure deployment procedures, continuous monitoring, and effective incident response capabilities. Supply chain security requires verification of all dependencies and infrastructure components.
Organizations that build this foundation create systems so robust that only extraordinary attackers with exceptional resources pose meaningful threats. For these organizations, advanced cryptographic systems like MPC provide genuine additional value by addressing remaining threats that can’t be mitigated through conventional means.
Organizations that skip these fundamentals in favor of advanced cryptography build impressive technical complexity on unstable foundations. They solve exotic problems while remaining vulnerable to mundane attacks.
Conclusion: The Capstone on the Pyramid
Advanced cryptography represents some of humanity’s most remarkable intellectual achievements. MPC provides mathematically verifiable guarantees that are impossible to achieve through traditional systems. Its ability to enable privacy-preserving collaboration and eliminate single points of failure makes it invaluable for specific use cases.
However, these technologies are tools for the top of the security hierarchy. They should be the final components in mature security programs that have already eliminated implementation vulnerabilities, established robust operational procedures, and built resilience against common attack vectors.
One pragmatic consideration, adoption of advanced technologies like MPC can sometimes serve as a catalyst that motivates organizations to align resources for the fundamental security improvements needed to realize that technology’s value. The excitement around sophisticated cryptographic systems might drive investment in operational security that wouldn’t otherwise happen. Post-quantum cryptography illustrates this perfectly. Migration is the capstone, but the preparation (creating cryptographic inventories, achieving operational agility) is foundational work that must start immediately. However, for most organizations, starting from the outside-in approach will deliver demonstrably larger security improvements per dollar invested.
The goal isn’t to avoid advanced cryptography but to apply it strategically. Organizations that understand the primacy of operational security can deploy MPC effectively as a capstone technology. Those that use it as a substitute for security fundamentals will find themselves with expensive, complex systems that provide little meaningful improvement to their actual security posture.
Defense first, technology second. This principle, applied consistently, transforms security from an exercise in deploying impressive tools into a systematic process of eliminating vulnerabilities. The result is not just better security, but more efficient allocation of finite security resources toward the threats that matter most.
