Ethereum’s Buterin advocates multisig, says Shamir backup is ‘way easier to screw up’

As a researcher with experience in the crypto industry, I believe that Vitalik Buterin’s advocacy for multisig solutions over Shamir backup is a prudent approach for securing personal funds. While both methods have their merits, the potential risks associated with Shamir backup are harder to mitigate than those of multisig.

Vitalik Buterin, a co-founder of Ethereum, openly expressed his preference for multisignature (multisig) wallets over Shamir backups in a public statement. According to him, the use of Shamir backup is more prone to errors for average users.

Among cryptocurrency enthusiasts engaged in a discussion about X, there has been growing concern over the security risks associated with cold wallets. This anxiety was heightened by Ethereum co-founder Vitalik Buterin’s recent warnings about the potential drawbacks of using cold wallets.

Peter Watts, the creator of NFT marketplace Reservoir, spoke on X to raise awareness about the potential hazards of relying on hardware wallets. He highlighted the possibility of misplacing seed phrases or impulsively transferring cryptocurrencies kept in a bank’s safety deposit box during unforeseen circumstances such as the COVID-19 pandemic.

When employing a hardware wallet, it’s essential to be aware of potential risks that originate from yourself. Be cautious of the following scenarios:

— Peter | Reservoir (@ptrwtts) April 30, 2024

When Vitalik Buterin entered the conversation, it shifted direction as he championed the application of multisignature solutions for safeguarding individual assets. He didn’t dismiss cold wallets entirely but instead emphasized the merit of decentralized security through multisig setups, which necessitate multiple keys for completing transactions, underscoring the significance of security within the crypto realm.

I prefer using a multisignature (M-of-N @ safe) wallet for over 90% of my personal funds. This means some keys are in my possession, but not enough to gain full control. The remaining keys are held by trusted individuals whom I don’t identify even among themselves. By doing this, I aim to distribute the security responsibility and minimize reliance on a single point of failure.

— vitalik.eth (@VitalikButerin) May 1, 2024

As a researcher studying secure key management systems, I strongly advocate for the implementation of an “M out of N” setup. In this arrangement, I personally hold some keys while others are kept by trustworthy entities. Crucially, neither party is required to reveal their identities to one another.

In response to Buterin’s idea, Ethereum investor Tobby Kitty proposed Shamir as an alternative method for safeguarding cryptographic keys or passwords by dividing them into several components called “shares.” Although Tobby acknowledged the advantages of Shamir, Buterin expressed concern, stating that it is more complex and prone to errors than multisig, since it necessitates careful handling and storage of multiple secret parts. The loss or mishandling of any share could result in an irreparable situation where the secret cannot be restored.

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2024-05-01 14:42