Vitalik Buterin, one of the co-founders of Ethereum, has expressed his preference for multisig over Shamir backup, stating that the latter is more prone to errors for regular users.
In a recent discussion within the crypto community, concerns about the security risks associated with cold wallets have become a major topic, spurred by Vitalik Buterin’s raised alarms about their potential drawbacks.
During the conversation, Peter Watts, the creator of the NFT marketplace Reservoir, warned about the risks of using hardware wallets. He highlighted the dangers of losing seed phrases or hastily transferring assets stored in a bank’s safety deposit box, especially in unforeseen situations like the COVID-19 pandemic.
The dialogue shifted when Vitalik Buterin joined in, promoting the utilization of multisignature solutions for securing personal finances. While he did not dismiss cold wallets entirely, Buterin stressed the importance of decentralizing security. He favored multisig setups where multiple keys are needed for transactions, underscoring the significance of security in the realm of cryptocurrency.
He advocated for an “M-of-N” configuration, where some keys are kept by the user and others by trusted parties, without revealing their identities to each other.
In response to Buterin’s recommendation, Ethereum investor Tobby Kitty suggested Shamir as a backup method for dividing cryptographic keys or passwords into multiple “shares.” While recognizing the advantages of Shamir, Buterin cautioned that it is more susceptible to errors compared to multisig. This is due to the precise handling and storage required for the various parts of the secret. If any of these parts are lost or mishandled, reconstructing the secret could prove impossible.
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