Ethereum co-founder Vitalik Buterin has stressed the importance of have a diverse set of “guardians” to maximize the security of self-custody of crypto assets through multisig and social recovery wallets.
Given the constantly increasing rate of cryptocurrency scams and hacks in recent years, and the bankruptcy of several large cryptocurrency companies in 2022, self-custody and maintaining sufficient security procedures for wallets have never been more critical.
In a March 16 Reddit post to the r/ethereum community titled “How I think about choosing gatekeepers for multisig and social recovery wallets,” Buterin gave a detailed review of how he approaches wallet security..
Self-custody is important. And social recovery and multisig is a great way to do it.
A quick reddit post on how I think about choosing guardians for social recovery and multisig wallets: https://t.co/FY1iyJ6BFC
— vitalik.eth (@VitalikButerin) March 17, 2023
Self-care is important. And social and multisig recovery is a great way to do that.
A quick reddit post on how I think about choosing keepers for social recovery and multisig wallets at the link.
Although their structures differ, multisig and social recovery wallets are based on gatekeepers, which serve as external sources to recover funds or approve transactions. In general, Keepers can be sets of external wallets owned by the same individual or addresses controlled by other people or entities.
According to Buterin, it is important to decentralize the guardians of the wallets, as owning more than one is a “tricky trade-off: you trust other people less, but you also concentrate more power in yourself, which can create risk if you’re hacked, coerced, incapacitated, or killed.”
“My general rule of thumb is that enough wards should be controlled by other people so that if you disappear there are enough other wards to get your funds back.”
Buterin went on to advise that someone’s set of guardians may not know each other, as this “greatly reduces the risk of them colluding with each other” to attack their wallets and assets. However, they should be able to find each other in case something happens to the owner of the wallet.
“If something happens to you, the guardians will still be able to find each otherbecause there are obvious standard protocols that naturally come to people’s minds in such a situation (for example, contacting your family),” he wrote.
Furthermore, the Ethereum co-founder suggested that people should “instruct guardians to ask a security question” that only they and the guardian will know when confirming a trade, and it will only be confirmed when the correct answer is given.
For “degen” (degenerate, in sports betting terminology) traders or those who don’t make long-term hodl plays, the Ethereum co-founder also emphasized that they should use gatekeepers who can respond quickly to suit their needs. fast moving.
“If you’re doing ‘degen’ things with on-chain contracts, you may need to act quickly: get money out if a contract gets a vulnerability, move money if you’re close to being liquidated, etc. If your needs include this, then you’ll want to find guardians who can act quickly at short notice.
Finally, Buterin recommended testing each keeper at least once a year.as this will confirm that they “have not forgotten or lost their accounts”.
Given the increasing rate of cryptocurrency scams and hacks in recent years, and the bankruptcy of several cryptocurrency companies last year, maintaining sufficient security procedures for wallets has never been more important.
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