Billionaire and Ethereum (ETH) creator Vitalik Buterin is highlighting what he thinks 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 individuals, is his preferred method of crypto security.
A multisig wallet requires two or more signatures before it could 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 funds. The Ethereum creator also references “social recovery wallets,” which he covered in more detail in a January 2021 blog post.
“Multisig wallets (eg. Gnosis Safe) are an easy and safe way to store funds, and can give you most of the key benefits of self custody – namely, your funds not being subject to disappearing because a centralized entity that seemed trustworthy turns out not to be at all – without the risks of having to be personally responsible for your entire security setup. I use a multisig wallet personally to store the bulk of my funds, as does the Ethereum Foundation.”
Buterin says trusting other people to help secure one’s coins means having a level of trust, but also allows for easier recovery of the crypto if you become compromised somehow.
“It makes natural sense to have at least one guardian be a wallet on one of your own devices – it doesn’t reduce decentralization to do that, and after all, it is your money. Once you go above one guardian controlled by yourself, however, you get into a tricky tradeoff: you get to trust other people less, but you’re also concentrating more power into yourself, which can create a risk if you get hacked, coerced, or incapacitated 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 recover your funds. That is, you should control at least one guardian, and at most N(set of addresses) -M (trusted people) guardians. Also, each guardian should be on a separate device (laptop, phone, old phone, etc).”
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This article has been originally published at: https://dailyhodl.com/2023/03/19/ethereum-eth-creator-vitalik-buterin-outlines-favorite-crypto-security-strategy/