Ethereum (ETH) creator Vitalik Buterin outlines favorite crypto security strategy
Billionaire and Ethereum (ETH) creator Vitalik Buterin highlights what he believes is the best way for users to take care of their own crypto.
In a new Reddit post, Buterin says that using multisigs, plus what he calls “guardians” or a network of trusted entities or individuals, is his preferred method of crypto-security.
A multisig wallet requires two or more signatures before it can confirm and process a transaction.
Buterin says that both he and the Ethereum Foundation use a multisig wallet to store the bulk of their crypto assets. The Ethereum creator also refers to “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 safe way to store funds and can provide you with most of the key benefits of self-custodial – namely that your money cannot disappear because a centralized entity that appeared to be trusted turns out. not to be 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 that relying on others to help secure one’s coins means having a level of trust, but also allows for easier recovery of the crypto if you are somehow compromised.
“It’s natural to have at least one guardian like a wallet on one of your own devices – it doesn’t reduce decentralization to do so, and after all, it’s your money. When you cross a guardian controlled by yourself, however, you end up in a difficult trade-off: you can rely less on other people, but you also concentrate more power into yourself, which can create a risk if you are hacked, forced , or incapacitate or die.
My rule of thumb is that enough guardians should be controlled by other people that if you disappear, there are enough other guardians left to get your money back. That is, you should control at least one guardian, and a maximum of N (set of addresses) -M (trusted persons) guardians. Each guardian should also be on a separate device (laptop, phone, old phone, etc.).
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