Ethereum founder urges self-custody – recommends use of multi-sig, social recovery wallets

Ethereum co-founder Vitalik Buterin said: Social media advertise advantage Use multisig and social recovery wallets for self-custody of crypto assets.

Buterin said self-control is important because centralized entities can become unreliable and people can lose their funds without notice. However, taking sole responsibility for the entire security system comes with inherent risks that can be minimized with the use of multisig and social recovery technology wallets, he added.

The Ethereum co-founder said he and the Ethereum Foundation use multisig wallets to protect most of their crypto assets.

Multisig & Social Recovery

According to Buterin, multisig wallets (such as Gnosis Safe) should be used for cold storage of crypto assets as they require multiple keys to authorize transactions.

A user can assign multiple people to hold keys and set up wallets, so x number of keys are required for a transaction to be approved — this can be all or some of the keys There is a possibility.

Social recovery wallets, on the other hand, are a recently developed nascent technology that will become more accessible in the coming months with applications like ‘Soul Wallet’.

A social recovery wallet allows you to authorize transactions with a single “master key” that can be restored if lost. Users can assign someone to hold a “recovery key” that can be used to reset the master key if lost.

Buterin says that once social recovery technology becomes available, it’s recommended to use it for hot storage.

He added that both technologies will allow people to protect their assets for life and ensure their recovery after death.

Guardian

Buterin says the key to using these technologies is choosing your “guardians” wisely. Guardians are people who are designated as owners of keys to verify transactions and restore wallets. He said:

“Two key questions for the safe use of multisig and social recovery wallets are (i) who do we choose as guardians and (ii) what instructions do we give them?”

According to Buterin, a guardian should be someone who doesn’t lose keys or collude to steal the owner’s assets. As such, Guardian should be as decentralized as possible. He added that each guardian’s risk should be different and that people should avoid commonalities when choosing a guardian.

He said a guardian could be a person or a device and using a device or wallet to act as a guardian would not reduce decentralization and was fine. However, most Guardians should not be devices directly controlled by one person.

Buterin recommends using guardians who don’t know each other, and if possible, the guardians should be in different countries. He said guardians need to know each other only if the owner has passed away, in which case these guardians will find each other naturally by reaching out to friends and family.

In addition, Buterin said guardians should be tested several times a year to ensure Guardians continue to have access to their keys and that there are no operational issues.