Creating a Wallet Without a Private Key or Seed Phrase

With the continuous evolution of cryptographic technology and the expansion of Web3, innovative wallet solutions have emerged to address the challenges faced by traditional cryptocurrency wallets. Among these innovations, MPC (Multi-Party Computation) wallets that eliminate the need for private keys or seed phrases have gained significant attention. This article explores the differences between MPC wallets and traditional EOA (Externally Owned Account) mnemonic wallet solutions, providing comprehensive guidance on creating and managing both types of wallets.

What is a Keyless MPC Wallet?

An MPC wallet represents a significant advancement in cryptocurrency wallet technology. MPC stands for Multi-Party Computation, which is a sophisticated privacy computing technology that fundamentally changes how private keys are managed. Unlike traditional mnemonic wallets where a single private key controls access to assets, MPC wallets distribute this responsibility across multiple parties.

In an MPC wallet system, private keys are never stored in a single location. Instead, the technology generates multiple key shards through a process called distributed key generation. Each shard is stored by different parties in different locations, creating a decentralized security model. When a user needs to sign a transaction, the MPC protocol coordinates with each independent private key shard owner to sign the transaction in a distributed and privacy-preserving manner.

The most significant benefit for users is the elimination of complex mnemonic phrases. Users only need to remember a simple password to manage their crypto assets, dramatically lowering the barrier to entry for cryptocurrency adoption. This approach also eliminates the single point of failure risk associated with traditional private keys, substantially enhancing overall wallet security.

Creating a Keyless MPC Wallet

The process of creating a keyless MPC wallet is straightforward and user-friendly. For new users who have downloaded a compatible wallet application, the setup begins by selecting "Create Wallet" followed by choosing the "Keyless Wallet" option. Existing users can access the wallet selector menu located in the top left-hand corner of the Wallet interface, select "+ Add a Wallet", click on the wallet name dropdown menu, choose "Add Wallet", and then select "Keyless Wallet" from the pop-up window.

Once in the creation interface, users select their preferred login method, such as "Sign in with Email". After entering an email address, users must switch to their inbox to retrieve the verification code sent by the wallet provider and enter it to complete the verification process. Following verification, users set a 6-digit transaction password and verify it once more to finalize the creation process. It is important to note that this transaction password is exclusively used for the keyless wallet and serves as the primary security measure.

Backing up your Keyless Wallet

Backing up a keyless MPC wallet is considerably simpler than backing up a conventional EOA mnemonic wallet. The process leverages cloud storage solutions to provide seamless backup functionality. Users begin by selecting "Take a minute to back up" on the wallet homepage, then proceed with the on-screen instructions to perform iCloud verification or Google Drive backup.

After completing the cloud backup process, the wallet backup status changes to "Backed Up", indicating successful enhancement of overall wallet security. This backup mechanism ensures that users can recover their wallet even if they lose access to their primary device, while maintaining the security advantages of the MPC architecture.

Four Major Advantages of a Keyless Wallet

Keyless MPC wallets offer several compelling advantages over traditional mnemonic wallet solutions. First, they provide a truly "keyless" experience that is significantly more user-friendly, eliminating the need to manage complex mnemonic phrases. Second, they utilize the safest and most reliable technical solution currently available in the industry, leveraging advanced cryptographic protocols.

Third, the reshare mechanism combined with independent passwords creates multiple layers of security, ensuring robust protection against various attack vectors. Finally, the 2/3 signature mechanism gives users absolute control over their wallet, meaning that even if one key shard is compromised, assets remain secure as at least two out of three shards are required to authorize transactions.

What is a Seed Phrase / Mnemonic Wallet?

A mnemonic wallet, also known as a seed phrase wallet, represents the traditional approach to cryptocurrency wallet generation based on deterministic wallet generation algorithms. This type of wallet uses a set of randomly generated words to represent the wallet's seed key, commonly referred to as the mnemonic phrase.

Typically, these phrases contain between 12 to 24 words, with many wallet providers offering options for both 12-word and 24-word mnemonic phrase wallets. The fundamental principle is that users only need to remember this set of words to restore their wallet accounts and gain complete control over their crypto assets. The advantage of mnemonic phrase wallets lies in their memorability and ease of recording, which facilitates backup procedures. However, users must carefully consider the risk of asset loss due to mnemonic phrases being stolen or forgotten, necessitating secure storage practices.

How to Create a Mnemonic Wallet?

Creating a mnemonic wallet involves a straightforward process. After clicking "Create Wallet", users can choose to set up either a "12-word mnemonic wallet" or a "24-word mnemonic wallet" based on their security preferences. Many wallet applications automatically create multi-chain seed phrase wallets by default, which means the wallet will support multiple blockchain networks.

The setup process includes the addition of several mainnets and typically takes approximately half a minute to complete. This automated approach ensures that users have immediate access to multiple blockchain ecosystems without requiring separate wallet creation for each network. The mnemonic wallet remains one of the most widely adopted wallet types in the cryptocurrency space.

Backing Up Your Mnemonic / Seed Phrase Wallet

Backing up a mnemonic wallet is a critical security procedure that requires careful attention. After wallet creation, users should click "Take a minute to back up" on the wallet homepage. It is essential to carefully read the instructions for backing up the mnemonic phrase, as proper backup is the only way to recover assets if the device is lost or damaged.

Users must securely save the mnemonic phrase as prompted, typically by writing it down on paper and storing it in a secure location. Some users choose to use metal backup solutions for enhanced durability. Once the mnemonic phrase has been properly recorded, users complete a verification process by entering the words in the correct order. After clicking "Confirm", the backup process is complete, and users can rest assured that their assets can be recovered if necessary. The security of a mnemonic wallet depends entirely on proper storage and protection of the seed phrase.

Conclusion

The evolution of cryptocurrency wallet technology has provided users with diverse options to manage their digital assets. Keyless MPC wallets represent a significant advancement in user experience and security, eliminating the complexity of mnemonic phrases while maintaining robust protection through distributed key management. These wallets are ideal for users seeking simplicity and enhanced security features. On the other hand, traditional mnemonic wallet solutions continue to offer proven reliability and user control, making them suitable for users who prefer established technology and are comfortable managing mnemonic phrases. Both wallet types have their place in the cryptocurrency ecosystem, and the choice between them depends on individual user preferences regarding security, convenience, and control. As the Web3 space continues to evolve, understanding these wallet options, particularly the differences between keyless and mnemonic wallet architectures, enables users to make informed decisions about protecting their digital assets. Whether choosing a cutting-edge MPC solution or a traditional mnemonic wallet approach, proper understanding and management of wallet technology remains essential for secure cryptocurrency asset management.

FAQ

What is a mnemonic wallet?

A mnemonic wallet uses a phrase of 12-24 words to backup and restore cryptocurrency wallets. It represents a seed that generates all keys in the wallet, ensuring secure fund recovery.

How to get mnemonic phrase trust wallet?

Open Trust Wallet, go to Settings > Wallets, select your wallet, and tap 'Show Recovery Phrase'. Verify your identity, then securely store the displayed 12-word phrase.

What is the 12-word phrase in trust wallet?

The 12-word phrase in Trust Wallet is a Recovery Phrase, also known as a seed phrase or secret phrase. It's used to protect and restore your wallet, serving as a backup for all your crypto assets.