Vitalik Buterin Advocates Multisignature Approach For Cryptocurrency Security

According to U.Today, Vitalik Buterin has recently offered some valuable advice on how to secure cryptocurrency holdings. He emphasized the use of unconventional yet highly effective methods. While hardware wallets are often suggested due to their strong security, Buterin highlighted the risks associated with them, primarily due to human error. These risks include misplacing the recovery seed, hiding it so well that it's forgotten, or unforeseen circumstances such as needing to relocate, leaving the seed in a bank safety deposit box. To mitigate these risks, Buterin uses a sophisticated method known as multisignature for over 90% of his personal funds. This approach is not merely about diversifying security measures, but decentralizing them. In a multisig setup, a transaction requires the approval of multiple, separately held keys to proceed, significantly reducing the risk of loss or theft. Buterin recommends an M-of-N scheme, where 'M' represents the minimum number of approvals needed from a total of 'N' possible keys. Not all keys are held by one person, and the identity of the holders is kept confidential, even from each other. This technique enhances security by not relying on a single point of failure. If one key is compromised, the funds remain secure as long as the other required keys are safe. However, this method does depend on the trustworthiness and reliability of those who hold the other keys. Buterin also critiqued the Shamir Backup, another method that splits a seed into multiple parts. While it may seem secure, Buterin argues that it is easier to mishandle compared to a multisig setup. The complexity and risk of error in reassembling the seed parts can outweigh its security benefits. He advises against storing large amounts of cryptocurrency on exchanges, in decentralized applications, or a custodial crypto storing service to ensure safety when using digital assets.