In a statement on
Buterin's comment came during a broader conversation about crypto security, which featured insights from several prominent figures in the ethereum ecosystem.
Why ethereum Founder Doesn't Use Hardware Wallets
The debate shed light on the complexities of digital asset security and showed a variety of opinions on how best to protect these assets. Peter Watts, founder of Reservoir, twitter.com/VitalikButerin/status/1785562273433387320″ target=”_blank” rel=”noopener nofollow”>he pointed the inherent risks associated with hardware wallets. He emphasized possible personal errors that can undermine the security of such devices.
“Counterpoint: When using a hardware wallet, the biggest risk is with you. Watch out for guns: Someone finds your hidden seed, you hide it so well you forget about it, put it in a bank safe deposit box, and then you hastily move abroad because of Covid,” Watts said, reflecting a critical vulnerability: the bug. human, which can lead to significant security breaches even with strong technological safeguards.
Responding to these concerns, Buterin twitter.com/VitalikButerin/status/1785562273433387320″ target=”_blank” rel=”noopener nofollow”>Elaborated about his personal approach to crypto security. He said: “The above is why I use multisig (@safe) for >90% of my personal funds. M-of-N, some keys are held by you (but not enough to block recovery), the rest are held by other people you trust. Don't reveal who these other people are, not even to each other. Decentralize your own security.”
Buterin's approach involves a multi-signature setup, which requires multiple keys to authorize transactions, thus dispersing risk and reducing the chances of theft or loss due to a single point of failure.
During the discussion, tobbykitty.eth proposed an alternative method known as Shamir's Secret Sharing, a cryptographic scheme that splits a secret into multiple parts. He argued its benefits by eliminating the need to trust others during the recovery phase, stating that this method allows full control over cryptographic keys without involving others.
However, Buterin countered this suggestion, pointing out the practical difficulties associated with correctly implementing Shamir's Secret Sharing, noting: “It's much easier to get wrong than a multisig.” He also warned about the practical use of Shamir's method.
“It depends on who stores Shamir's shares! I think the questions (i) 'trust your other devices' versus 'trust your friends' (ii) shamir versus multisig are orthogonal,” Buterin concluded. Therefore, he underscored the complexity and potential for user error inherent in effectively implementing Shamir's method.
The starting point of the debate was a publication by Kofi, associated with gasfees.io. It provided a real-world perspective on the importance of using hardware wallets despite their potential drawbacks. He vividly described the emotional and financial impact of losing important cryptocurrency holdings and advocated the use of hardware wallets as a fundamental component of a comprehensive security strategy.
He said: “Buy a hardware wallet today and start using it as soon as possible. Send some eth to your hardware wallet from your hot wallet (Metamask, Phantom, Rainbow, etc.). Then, transfer the majority of your funds to your hardware wallet, everything you won't critically need for the next few days. Keep your wallet in a safe place.”
Kofi's advice reflects a pragmatic approach to cryptosecurity, emphasizing the importance of protecting against online threats. However, he also later acknowledged, in response to the founder of ethereum, that investors with a large portion of their net worth in cryptocurrencies should consider using a multi-sig wallet. “With multi-signature, multiple keys (can be a combination of hardware and hot wallets) are needed to sign any transaction,” he added.
At press time, the price of ethereum was $2,916.
Featured image of NZZ, chart from TradingView.com
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