Vitalik Buterin Reveals His Go-To Strategy for Keeping Crypto Safe
Vitalik Buterin, the founder of Ethereum (ETH) and a billionaire, recently shared his preferred method for users to self-custody their cryptocurrency.
Buterin suggests using multisig wallets and trusted individuals or devices called “guardians” to ensure secure storage.
Buterin also mentions “social recovery wallets,” which he discussed in more detail in a January 2021 blog post.
“Multisig wallets (eg. Gnosis Safe) are an easy and safe way to store funds, and can give you most of the key benefits of self-custody – namely, your funds not being subject to disappearing because a centralized entity that seemed trustworthy turns out not to be at all – without the risks of having to be personally responsible for your entire security setup. I use a multisig wallet personally to store the bulk of my funds, as does the Ethereum Foundation.”
According to Buterin, trusting other people with securing one’s coins entails a certain level of trust, but it also makes it easier to recover one’s cryptocurrency if one becomes compromised.
Buterin recommends that at least one guardian should be a wallet on the user’s own device, and others should control enough guardians to recover one’s funds if the user disappears.
Each guardian should be on a separate device, according to Buterin.
“My rule of thumb is that enough guardians should be controlled by other people that if you disappear, there are enough other guardians left to recover your funds. That is, you should control at least one guardian, and at most N(set of addresses) -M (trusted people) guardians. Also, each guardian should be on a separate device (laptop, phone, old phone, etc).”