Concerns over the security of cold wallets have sparked a discussion among crypto enthusiasts, with Ethereum co-founder Vitalik Buterin weighing in on the matter. Buterin expressed preference for multisignature (multisig) solutions over Shamir backup, citing the latter’s susceptibility to errors for ordinary users.
The conversation gained traction following remarks by Peter Watts, founder of NFT marketplace Reservoir, who cautioned against the risks associated with hardware wallets. He highlighted potential pitfalls such as the loss of seed phrases or hasty asset transfers from bank safety deposit boxes, especially during unforeseen events like the COVID-19 pandemic.
Buterin’s intervention shifted the focus to the use of multisig setups for personal fund security. While acknowledging the value of cold wallets, Buterin underscored the importance of decentralizing security through multisig configurations. He advocated for setups where multiple keys are required for transactions, emphasizing the paramountcy of security in the realm of cryptocurrency.
In endorsing a “M-of-N” configuration, Buterin suggested that some keys should be held by the user while others by trusted individuals, with their identities undisclosed even to each other.
In response to Buterin’s endorsement, Ethereum investor Tobby Kitty proposed Shamir, a backup method for splitting cryptographic keys into multiple shares. However, Buterin cautioned against Shamir, noting its greater susceptibility to mishandling compared to multisig. He highlighted the complexity of storing and handling multiple parts of the secret, emphasizing that any loss or mishandling could render it impossible to reconstruct the secret.
Buterin’s advocacy for multisig solutions underscores the ongoing quest for robust security measures within the cryptocurrency ecosystem, as stakeholders seek to mitigate risks and enhance user protection.
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