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What is Threshold-FHE?

Unlike Single-Key FHE and Multi-Key FHE, Threshold-FHE is another variant of FHE schemes that is used heavily in Web3. In short, Threshold-FHE combines both FHE and threshold cryptography, to enable secure computations on encrypted data in a distributed manner. Here’s how it works:

Data Encryption: Data is encrypted using a fully homomorphic encryption scheme.

Distribution of Decryption Key: The decryption key is split into multiple shares and distributed among several parties using threshold cryptography.

Secure Computation: Encrypted data can be processed (e.g., computations can be performed on it) without decrypting it. This computation is possible due to the homomorphic properties of the encryption.

Threshold Decryption: To decrypt the result of the computation, a minimum threshold of parties (e.g., t out of n) must cooperate to combine their key shares. This ensures that no single party can decrypt the data alone, enhancing security.

Threshold-FHE can be very useful, especially when working with native blockchain applications like DeFi, Game, Governance, etc.