In response to concerns about the risks associated with personal crypto storage, Vitalik Buterin, the founder of Ethereum (token $ETH), shared insights on his preferred method for securing his cryptocurrency funds. This approach highlights the vulnerability of relying solely on hardware wallets, which can lead to several user-related errors.
Buterin revealed that he uses a multisignature (multisig) setup for managing over 90% of his funds. This security method, typically utilized to safeguard against theft or unauthorized access, requires multiple keys to authorize a transaction. Buterin’s configuration, often executed through platforms like Safe (formerly Gnosis Safe), involves an M-of-N scheme where several keys are needed, with some held personally and others distributed among trusted individuals.
Decentralizing Security
The Ethereum founder advises not only using multiple keys but also keeping the identities of those who hold these keys confidential, even from each other. This strategy aims to decentralize security by reducing the risks that come from any single point of failure, including the key holders themselves. Buterin’s commentary came as a reply to a tweet pointing out potential “footguns” or user errors associated with hardware wallets, such as misplacing or forgetting the location of the seed phrase, or having to abandon it during unexpected cross-country moves.
Buterin’s advice underscores a critical perspective on personal responsibility and the complexity of managing digital assets securely. His approach suggests a shift towards more sophisticated security arrangements beyond traditional methods, emphasizing trust and distributed risk among multiple stakeholders.
