Vitalik Buterin, the co-founder of Ethereum, recently shared his advice for securing cryptocurrency in a Reddit post.
Buterin emphasizes the importance of using multisig and social recovery wallets to store funds, as they offer increased security and protection against theft or loss.
He also provides insights on choosing guardians and how to instruct them to minimize the risk of collusion and coercion.
Multisig wallets and social recovery wallets are key to self-custody, without having to be personally responsible for your entire security setup. Buterin personally uses a multisig wallet to store the bulk of his funds, as does the Ethereum Foundation.
Social recovery wallets are easier to use, and once mature enough, Buterin recommends using them for hot wallets that store a small portion of a person or organization’s funds, and multisigs for cold wallets that store a person or organization’s savings.
Choosing the right guardians is crucial to secure crypto. Buterin suggests choosing guardians who do not often talk to each other, ideally not even knowing each other, to minimize the risk of collusion. Guardians should also be on separate devices and ask a security question before approving an operation.
Buterin recommends instructing guardians to ask a security question that only the two of you and very few other people know, such as the last time you met and what kind of food you had.
Guardians should also be tested at least once a year with a test operation, using half your guardians for one and the other half of your guardians for the other. This ensures that your guardians haven’t forgotten or lost their accounts.
The future of guardian tech
One of the challenges with guardians today is that they do not yet exist to protect your financial privacy from your guardians. However, Buterin believes that this is a technical problem that can be solved technically. The guardians can guard a “lockbox” contract where the link between your account and the lockbox is hidden.
Making the link stay hidden even after a recovery requires more advanced ZK-SNARK tech, which is a problem that Buterin expects to be slowly solved over the next few years.
As the world of cryptocurrency continues to evolve and grow, it is essential to prioritize security measures to protect your crypto assets. Buterin’s advice offers valuable insights into securing cryptocurrency, emphasizing the importance of multisig and social recovery wallets, choosing guardians who do not know each other, and testing guardians at least once a year.
While the tech for protecting financial privacy from guardians is still developing, Buterin is optimistic about the future of guardian tech and the potential solutions that can be developed in the years to come.