Ethereum co-founder Vitalik Buterin advised the crypto community to use multisig cryptocurrency wallets to improve the security of their digital assets.
In response to comments from Peter Watts, founder of the Reservoir protocol, about security concerns when storing cryptocurrencies, the Ethereum co-founder highlighted the advantages of using multisig wallets, in which the management of stored funds is shared with others. people.
Buterin clearly highlighted that he himself uses this type of wallet to store around 90% of his digital assets.
The security of cryptocurrencies
Through X, Watts highlighted some disadvantages that hardware wallets have for custody cryptoassets.
Although these cryptocurrency wallets provide a secure form of storage and self-custody, it is also true that they require greater discipline and attention from users when saving private keys or seed phrases safely, which is why Watts argued that one of the potential risks when using hardware wallets are the human errors. Users can lose access to their cryptocurrencies if they forget or lose the private keys, she said.
Watts stressed that when using a hardware wallet, the biggest risk is yourself.
“Someone finds your hidden seed phrase, you hide the seed so well that you forget, you put the seed phrase in a bank security deposit and then you hastily move abroad because of Covid”wrote on X, pointing out possible scenarios in which access to cryptoassets stored in a hardware wallet could be lost.
Buterin responded to these concerns by highlighting the security provided by using multisig wallets. “The above is why I use a multisig for >90% of my personal funds”, said the Ethereum developer.
Buterin's recommendations when using a multisig
Even as Buterin stressed the importance of using a multisig, he gave some tips to improve the security of stored cryptocurrencies.
For example, the co-founder of Ethereum argues that using a “M-of-N” scheme With multisig wallets you ensure that stored funds are always accessible. In addition, he recommended that some of the keys that manage and unlock the funds be distributed among highly trusted people and, finally, he advised not to reveal the identities of these people or entities to each other. All this, in order to preserve the security of crypto assets.
What are multisig wallets?
The multisig wallets They are those in which the administration and management of digital assets is divided between several people. In this way, fund transfers and payments must be authorized collectively, increasing the decentralization and security of funds.
In the case of Buterin, he commented that he keeps some of the private keys to sign the transactions and that he divides the rest among people he trusts. Likewise, he indicated that he uses an “M-of-N” scheme, which means that only some of the authorized keys, of the total keys created in the wallet, must participate to sign a transaction.
“M-of-N, you have some keys (but not enough to block recovery), the rest are held by other people you trust. “Do not reveal who those other people are, not even to each other.”Buterin commented.
Multisig wallets are based on smart contracts and act as a vault or safe governed by code.
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