Secret Sharing refers to cryptographic methods for taking a secret, breaking it up into multiple shares, and distributing the shares among multiple parties, so that only when the parties bring together their respective shares can the secret be reconstructed. More specifically, the holder of a secret, sometimes referred to as the dealer, creates n shares of a secret and defines a threshold t for the number of shares that are required to reconstruct the secret. The dealer then proceeds to distribute the shares so they are controlled by different parties.
In secure secret sharing schemes, an attacker that gains access to fewer shares of the secret than defined by the threshold gains no information about the secret.
Secret sharing schemes are useful because they allow for more secure storage of highly sensitive data, including encryption keys, missile launch codes, and numbered bank accounts. By distributing the data, there is no single point of failure that can lead to its loss.
Secret sharing schemes are important in cloud computing environments because they provide a means to creates a high level of security for secrets using algorithms implemented in software (as opposed to requiring specialized hardware).