Ethereum (ETH) creator Vitalik Buterin outlines the preferred crypto security strategy
Ethereum (ETH) billionaire and creator Vitalik Buterin highlights what he believes is the best way for users to self-custody their crypto.
In a new Reddit post, Buterin says that using multisigs plus what he calls “guardians,” or a network of trusted devices or people, is his preferred method of cryptosecurity.
A multisig wallet requires two or more signatures before it can confirm and process a transaction.
Buterin says both he and the Ethereum Foundation use a multisig wallet to store the majority of their crypto funds. The Ethereum creator also references “social recovery wallets,” which he covered in more detail in a January 2021 blog post.
“Multisig wallets (e.g. Gnosis Safe) are a simple and secure way to store funds and can give you most of the key benefits of self-custody – namely, your funds don’t disappear because it turns out to be a centralized entity trustworthy not at all – without the risk of having to be personally responsible for your entire security setup. I personally use a multisig wallet to store the bulk of my funds, as does the Ethereum Foundation.”
Buterin says trusting other people to help secure your coins means having a level of trust, but also allows for easier crypto recovery if somehow compromised.
“Of course it makes sense to have at least one guardian as a wallet on one of your own devices – it doesn’t reduce decentralization, and after all it’s your money. However, once you move beyond a Guardian you control, you run into a tricky trade-off: you may be less able to trust other people, but you also focus more power on yourself, which can pose a risk if you’re hacked, coerced, or disabled or die.
My rule of thumb is that enough other guardians should be checked so that if you disappear, there are enough other guardians left to recover your money. That is, you should control at least one guard and at most N(set of addresses) -M (trustworthy people) guards. Also, each guardian should be on a separate device (laptop, phone, old phone, etc.).”
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