> For the complete documentation index, see [llms.txt](https://timechain.gitbook.io/neucron/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://timechain.gitbook.io/neucron/core-concepts/mpc-key-shards.md).

# MPC Key Shards

## The problem with a single key

A traditional wallet has one private key. That creates two unacceptable failure modes:

1. **Theft:** anyone who obtains the key obtains everything, instantly and irreversibly.
2. **Loss:** if the key is lost, the funds are gone forever.

Multi-party computation (MPC) solves both by splitting signing power into **shards**. No shard is a key. No shard can sign alone. A transaction is signed only when a threshold of shards collaborate in a distributed signing protocol, so **a complete private key never exists in one place, not even for a moment**.

## 2-of-3: the standard Neucron scheme

Neucron's default MPC scheme splits signing power into **3 shards, any 2 of which are required to sign**:

```mermaid
flowchart TB
    subgraph Wallet["One wallet, three shards"]
        S1[Shard 1<br/>User device]
        S2[Shard 2<br/>User cloud backup]
        S3[Shard 3<br/>Neucron]
    end
    S1 -- "sign" --> TX[Signed transaction]
    S3 -- "sign" --> TX
    S2 -. "recovery only" .-> TX
```

This threshold is deliberately chosen:

* **No single point of compromise.** An attacker must breach two independent systems in different trust domains to move funds.
* **No single point of loss.** Any one shard can be lost (a phone replaced, a cloud account deleted, a provider outage) and the wallet still works and can be recovered from the remaining two.
* **A natural recovery path.** The wallet is recoverable from any two shards, which makes backup and device-migration flows simple and safe.

## Shard placement defines custody

The threshold is constant; **where the shards live determines who the wallet belongs to**. This is the single most important idea in Neucron's custody architecture:

| Who holds the shards                                         | Resulting model                                                                                                                                                         |
| ------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| User device + user cloud backup + Neucron                    | **Non-custodial.** The user controls 2 of 3 shards. Neucron can never move funds alone and cannot be coerced into moving them.                                          |
| Neucron (encrypted)                                          | **Custodial.** Neucron safeguards the key material; the owner authenticates to transact.                                                                                |
| Multiple backend systems / cloud providers / vendor partners | **Server-side MPC.** No single backend, cloud, or vendor can sign alone. Built for institutions that must distribute trust across their own infrastructure and vendors. |

The full menu, with creation schemas for each, is in [Custody Models](https://timechain.gitbook.io/neucron/core-concepts/custody-models).

## Recovery with key shards

Because any 2 of 3 shards reconstruct signing power, recovery is a first-class API operation rather than a disaster:

```typescript
// Recover a wallet from a held key shard (e.g. after device loss)
await sdk.wallet.recoverWallet({
  walletID: 'wal_def456',
  keyshard: 'ks_...',
});
```

Wallets expose their recovery posture (`backup_status`, `cloud_sync_status`, `neucron_cloud_status`) so your product can show users exactly how protected they are, and nudge them to complete a backup shard before it is needed.

{% hint style="info" %}
**Why not seed phrases?** A seed phrase is a single point of failure wrapped in twelve words. MPC shards give users and institutions the same self-sovereignty with theft resistance, loss resistance, and recovery built in.
{% endhint %}