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Ethereum founder Vitalik Buterin has explained why as much as 90% of his personal crypto funds are secured through a multi-signature hardware wallet solution. Buterin revealed this information while commenting on a trend urging crypto users to migrate to hardware wallet solutions.
Crypto data analyst Kofi sparked the conversion by painting a scenario where crypto users woke up one day and discovered their investments had been stolen. Notably, stories of devastating losses are rampant in the crypto scene, particularly as the bull market gains momentum.
As crypto enthusiasts participate in airdrop activities and other endeavors, they become susceptible to bad actors who create similar but fraudulent activities intended to steal their seed phrase to ultimately drain their wallets.
Renowned crypto investigator ZachXBT recently uncovered that the Lazarus Group orchestrated over 25 crypto hacks to launder $200 million. On the other hand, security firm CertiK disclosed that the crypto community witnessed exploits worth $21 million in April, often involving hacks and wallet drainers.
While utilizing a hardware wallet solution could prevent some of these exploits, the founder of the NFT trading platform Reservoir contends that the primary risk shifts to the users themselves. The risks include forgetting or losing the seed phrase, especially if it is hidden too well or stored in a bank safety deposit box and becomes inaccessible due to sudden relocation.
In response, Vitalik Buterin noted that the cited concerns are precisely why he opted for a multisig service like Safe for over 90% of his personal funds.
The above is why I use a multisig (@safe) for >90% of my personal funds 🙂
— vitalik.eth (@VitalikButerin) May 1, 2024
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.
He explained that multi-sig setups, where multiple keys are required for transactions but not all held by the user, provide an added layer of security. Typically, some keys are held by the user, but not enough to independently recover the funds. The remaining keys are entrusted to other individuals whom one trusts.
“Don’t reveal who those other people are, even to each other. Decentralize your own security.” Buterin concluded.
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