crypto-economy.com
TL;DR
- Vitalik Buterin highlights the importance of security in cryptocurrency management.
- Recommends the use of multisig wallets to protect digital funds.
- Warns of the risks associated with storing salvage seeds and offers safety alternatives.
Vitalik Buterin, well-known co-founder of Ethereum, has shared valuable recommendations about security in the world of cryptocurrencies.
In a context where hardware wallets are widely recommended for their robust security, Buterin points out the risks inherent to them, mainly due to human errors that can compromise the security of the funds.
The above is why I use a multisig (@safe) for >90% of my personal funds 🙂
M-of-N, some keys held by you (but not enough to block recovery), the rest held by other people you trust. Don't reveal who those other people are, even to each other.
Decentralize your own security.
— vitalik.eth (@VitalikButerin) May 1, 2024
The main danger that Buterin highlights is the possibility of losing the recovery seed of the hardware wallet, either because it is kept in a place so safe that its location is forgotten or due to unforeseen situations such as sudden moves.
The risks mentioned emphasize the importance of exploring alternative security measures to protect digital assets effectively.
In response to these potential dangers, Buterin shares his inclination towards using multisig wallets for securing a significant portion, over 90%, of his personal funds.
This type of wallet requires the approval of multiple keys to authorize transactions, which significantly decreases the risk of loss or theft compared to single-key wallets.
Within his multisig approach, Vitalik uses an M-of-N scheme, where “M” represents the minimum number of approvals needed out of a total of “N” possible keys.
Additionally, it highlights the importance of decentralizing security by distributing keys among trusted people, keeping the identities of key holders secret even from each other.
Vitalik Buterin recognizes the existence of other methods such as the Shamir backup
An efficient privacy algorithm also known as SSS, which divides a seed into multiple parts, Vitalik warns about its complexity and higher error proneness compared to multisig wallets.
Properly assembling seed parts can present additional challenges that could outweigh the safety benefits this method offers.
Buterin’s perspective highlights the importance of choosing security methods that do not depend on a single point of failure and are supported by decentralization and trust between parties.
These tips are especially relevant in a context where the security of cryptocurrencies is a priority for investors and users of this constantly evolving digital financial ecosystem.