What Are the Trade-Offs between ‘Hot’ and ‘Cold’ Storage in an MPC System?

'Hot' storage refers to key shards held online, allowing for fast, automated transaction signing, but with higher risk of cyber-attack. 'Cold' storage holds key shards offline, offering maximum security against online threats but introducing latency and operational complexity for transaction signing.

An institutional MPC system typically uses a hybrid approach, with a low-threshold hot shard for daily transactions and a high-threshold cold shard for large, infrequent transfers.