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Ethereum founder Vitalik Buterin is advising people to "decentralize your own security," after weighing in on a Twitter discussion about using cold wallets.
To prove his point, Buterin said that he keeps 90% of his crypto funds in a mutisig Safe wallet.
"M-of-N, some keys held by you (but not enough to block recovery), the rest held by other people you trust," he wrote. "Don't reveal who those other people are, even to each other."
The "m-of-n" Buterin referred to describes one of the ways multisig, or multi-signature, wallets can be set up. The first variable refers to minimum number of signatures required to sign a contract, therefore spending or transferring funds from the wallet. The second variable refers to the total number of possible signatories that exist for the wallet.
The conversation started after a developer and research, who goes by the pseudonym 0xkofi on Twitter, urged crypto traders to think about how devastating it would be to lose all their funds and avoid it by investing in cold storage.
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
"Your hardware wallet will be your fortress of solitude," Kofi wrote. "It will allow you to sleep peacefully at night. It will protect you so that you can survive this game long enough to win."
But not everyone is sold on that being the right way to protect their personal crypto stash. Peter Watts, Uneven Labs CEO and the founder of Reservoir, a developer platform for launching NFT collections, highlighted the risks involved in relying on hardware wallets.
"When using a hardware wallet, the biggest risk becomes yourself," he wrote, adding that someone might find a stashed private seed phrase, or a user could secure it so well that they can't retrieve it themselves.
That's when Buterin chimed in to describe how he makes sure that he isn't the single point of failure for the security of his cold storage wallet.
People often think of @safe wallets as a team only solution.
While this might have been true in early 2020, the user base has since evolved significantly.
Today, individuals make up more than 99% of @safe users, including notable ones like @VitalikButerin and @punk6529 https://t.co/EyZuKpF2xa
— Daniel (@danftz) May 1, 2024
Although Safe (formerly Gnosis Safe) multisig wallets have often been treated as a product to help DAOs and other groups manage shared treasuries, there's a lot of individuals who use them in a similar way to Buterin.
"Today, individuals make up more than 99% of Safe users, including notable ones like Vitalik Buterin and Punk6529," wrote a SafeDAO contributor and delegate known as Daniel on Twitter.
Edited by Andrew Hayward