2024-05-01 13:14:51
Posted: 1 May 2024
- Vitalik Buterin recommends “multi-sig” to solve seed phrase problems with hardware wallets.
- Shamir is another option for storing seed phrases, but not described by Buterin.
Self-custodial wallets, especially hardware wallets, have become popular as third-party risks come to light, such as in the case of the FTX outbreak.
Crypto Twitter clearly reminds users of these risks through a catchy phrase:
“Not your keys, not your cryptocurrencies.”
However, users are perhaps the biggest risk factor for hardware wallets. They can easily forget the hidden seed or, even worse, steal it.
Ethereum Founder Buterin Recommends “Multi-Sig” to Solve Wallet Risk
But Ethereum [ETH] Vitalik Buterin proposed a solution to this hardware wallet problem and noted:
“The above is why I use multi-signature (Safe) for > 90% of my personal funds. M-as-N, you hold some keys (but not enough to prevent recovery), the rest are held by other people you trust. Do not reveal who these other people are, not even to each other. Decentralize your own security.”
“Multi-sig” refers to having multiple tokens on a wallet to reduce a single point of failure.
Alternatively, you can use Shamir backup, which splits the initial recovery phrase into multiple parts (split) usually between devices.
However, Buterin described Shamir’s effectiveness, saying:
msgstr “It is much easier to make a mistake than a multiple signature.”
While supporting “multi-signature”, Vitalik emphasized that,
“It depends on who stores Shamir’s shares! I think the questions (i) “trust your other devices” vs. “trust your friends” (ii) shamir against multisig, They are orthogonal.”
he mercado for hardware wallets to grow from $350 million in 2024 to $1.56 billion in 2029.
Growth is likely to come with the challenges mentioned above, but Shamir or “multi-factor” may be possible solutions based on the user’s risk profile.
This is an automatic translation of our English version.
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