For security purposes, we require that each withdrawal be "approved" by multiple servers so that in the event a single server is compromised the attacker won't be able to siphon funds from the entire wallet. The typical approach to execute this concept is a
MultiSig address where a transaction is only approved after it is signed by multiple entities.
However, the fees for a 2/3
MultiSig transaction are nearly twice as high as fees for a regular transaction. If we wanted 3/4 (or higher) MultiSig the fees would be even costlier. This got me thinking of a way to take advantage of the security benefits offered by MultiSig transactions without suffering from excessive fee consumption in the process.
The immediate solution that comes to mind is sharding. In short, instead of using MultiSig we can safely break up the PK using Shamir's Secret Sharing Scheme with unlimited schemes (such as 4-of-7 or 3-of-4 etc) and store the shards on separate servers thereby requiring multiple servers to "sign" a withdrawal request.
Does MultiSig provide any (security) benefit over sharding? Is sharding a viable alternative to MultiSig?
Perhaps the only problem with this proposal is that each server cannot independently "authorize" the transaction using its "shard". At some point, all shards would need to be known to "reassemble" the PK so the attacker could still use this as the "weakest link" to steal the PK? Is this correct?