Ethereum co-founder Vitalik Buterin publicly favored multisig over Shamir backup, saying the latter is “way easier to screw up” for ordinary users.
In an X discussion among crypto enthusiasts, worries about the security risks linked to cold wallets have taken center stage, prompted by Ethereum co-founder Vitalik Buterin‘s raised concerns regarding their potential pitfalls.
Peter Watts, the founder of NFT marketplace Reservoir, went on X to caution about the dangers of using hardware wallets, mentioning the risk of losing seed phrases or hastily moving assets stored in a bank’s safety deposit box, especially during unexpected events like the COVID-19 pandemic.
Counterpoint: when using a hardware wallet, the biggest risk becomes yourself. Beware of the footguns:
— Peter | Reservoir (@ptrwtts) April 30, 2024
– Someone finds your stashed seed
– You hide the seed so well you forget
– You put the seed in a bank safety deposit then hastily move overseas due to covid 😬 https://t.co/UzAV13wzPB
The conversation took a new turn when Vitalik Buterin joined it, advocating for the use of multisignature (also known as multisig) solutions for securing personal funds. Buterin didn’t reject the idea of cold wallets but highlighted decentralizing security, preferring multisig setups where multiple keys are required for transactions, emphasizing the importance of security in crypto.
— vitalik.eth (@VitalikButerin) May 1, 2024The above is why I use a multisig (@safe) for >90% of my personal funds 🙂
M-of-N, some keys held by you (but not enough to block recovery), the rest held by other people you trust. Don't reveal who those other people are, even to each other.
Decentralize your own security.
He emphasized the need for a “M-of-N” configuration, where some keys are held by the user and others by trusted individuals, without disclosing their identities even to each other.
In response to Buterin’s suggestion, Ethereum investor Tobby Kitty proposed Shamir, a backup method for splitting cryptographic keys or passwords into multiple parts called “shares.” While acknowledging the benefits of Shamir, Buterin cautioned that it’s “way easier to screw up” compared to multisig, as it depends on carefully handling and storing many parts of the secret. If any of these parts are lost or handled incorrectly, it could be impossible to put the secret back together.