Private Keys Are the Worst Design in Crypto — And It’s Costing Billions

For more than a decade, crypto security has been built on a fragile assumption:
that a single secret — a private key — can be safely generated, stored, backed up, and never exposed.

Reality has proven otherwise.

A Design That Keeps Failing

Since 2011, crypto hacks and scams have resulted in an estimated $22.7 billion in losses across hundreds of reported incidents.
Year after year, investigations point back to the same root cause: private key compromise.

In 2024, total crypto-related losses reached approximately $2.2 billion, with private key-related incidents contributing the largest share.

By the first half of 2025, the situation worsened. Industry reports estimate losses between $2.1–$2.47 billion, of which 69–80% were attributed to wallet, private key, or signing infrastructure compromise.

All figures are based on incomplete and underreported public data.

The industry keeps patching the symptoms.
But the disease remains untouched.

Millions of Users, One Structural Weakness

This is not a problem limited to whales or exchanges.

Phishing, malware, leaked recovery phrases, browser exploits, and compromised password managers have impacted millions of users worldwide. Most retail losses go unreported, fragmented into transactions too small to make headlines — but devastating in aggregate.

The uncomfortable truth is this:
Crypto wallets demand perfect key management from imperfect humans.
And when failure happens, users are blamed — not the system.

The Largest Theft Proved the Point

In February 2025, the industry suffered its largest single theft to date:  approximately $1.5 billion lost in a Bybit-related incident.

The attack did not break cryptography.
It broke the signing process.

By compromising the transaction approval interface, attackers effectively seized wallet control. Private keys did not prevent the theft — they enabled it.

This incident surpassed all previous records and demonstrated a harsh reality:
as long as signing authority can be captured, assets are never truly safe.

The Question the Industry Avoided

For years, wallet security has focused on one goal:
protect the private key better

Encrypt it.
Split it.
Hide it in hardware.
Ask users to guard it more carefully.

But no matter how advanced these defenses become, they all share the same flaw:
A private key must exist — somewhere, at some time.
That existence defines the attack surface.

So the real question is no longer how to protect private keys.
The question comes,  why do they need to exist at all.

Alph.AI and the Shift Beyond Private Keys

At Alph.AI, we started from a different premise:

If private keys are the problem, removing them entirely should be the solution.

Instead of managing keys, Alph.AI’s wallet architecture eliminates the concept of a complete private key altogether.

• Signing authority is distributed across multiple independent components.
• No single system, device, or person can authorize a transaction alone.
• At no point does a full private key exist — not encrypted, not reconstructed, not recoverable.

This is achieved through a next-generation MPC-based signing system combined with isolated execution environments and zero-trust operational design.

In practical terms:

• There is nothing for hackers to steal.
• There is no single path to attack.
• There is no internal “god mode.”