Ethereum co-founder Vitalik Buterin emphasized the importance of having a diverse set of “guardians” to maximize the security of self-management of crypto assets through multisig and social wallets.
Due to the ever-increasing rate of cryptographic scams and hacks over the past few years and a few notable ones crypto firms will go bankrupt in 2022the importance of self-care and maintaining adequate wallet security procedures has never been more important.
On Reddit March 16 post on the r/ethereum community titled “How I Think About Choosing Guardians for Multisig and Social Recovery Wallets,” Buterin detailed how he approaches wallet security.
Self-care is important. And social recovery and multisig is a great way to do that.
A quick reddit post on how I’m thinking about choosing social recovery guardians and multisig wallets:https://t.co/FY1iyJ6BFC
— vitalik.eth (@VitalikButerin) March 17, 2023
Although their structures differ, Multisig wallets and Social Renewal wallets rely on guardians who essentially serve as external sources for raising funds or approving transactions. Generally, custodians can be a set of external wallets belonging to the same individual or addresses controlled by other people/entities.
According to Buterin, it’s important to decentralize wallet guardians because having more than one of your guardians presents a “tricky trade-off: you trust others less, but you also concentrate more power within yourself, which can be a risk if you get hacked, forced, incapacitated, or die.”
“My rule is that enough guardians should be controlled by other people so that if you disappear, there will be enough other guardians left to recover your funds.
Buterin further advised that one’s group of guardians should not know about each other because it “greatly reduces the risk of them colluding” to attack their wallets and possessions, but they should still be able to find each other in case of something. happens to the owner of the wallet.
“If something happens to you, they’ll still be able to find each other because there are obvious standard protocols that naturally come to people’s minds in that situation (like contact your family),” he wrote.
Addition, Co-founder of Ethereum he suggested that people “instruct guardians to ask a security question” that only they and the guardian would know when they confirm the operation, and would only confirm if the correct answer was given.
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For degen traders or those who do not play long-term HODL games, the Ethereum co-founder also emphasized that they should use guardians who can respond quickly to meet their fast-changing needs.
“If you’re doing degen stuff with on-chain contracts, you might need to act fast: pull money if a contract gets vulnerable, move money when you’re close to liquidation, etc. If your needs include this, then you want to find custodians who can quickly and act quickly.’
Finally, Buterin recommended testing each guardian at least once a year, as this will confirm that “they haven’t forgotten or lost their accounts.”
With the ever-increasing rate of crypto scammers and hacks over the past few years, and several crypto firms going bust last year, the importance of maintaining adequate wallet security practices has never been more important.