Vitalik Buterin, the co-founder of Ethereum, recently took to his Twitter account to share his thoughts on the use of multi-sig and social recovery wallets.
In his post, Buterin outlined the benefits and drawbacks of each type of wallet and offered suggestions on how to choose the right guardians for them.
According to Buterin, he personally uses a multisig wallet to store most of his funds, and the Ethereum Foundation also uses this type of wallet.
He believes that social recovery wallets will be ideal for “hot wallets,” which store small portions of funds for daily use, while multi-sig wallets will be best for “cold wallets,” which hold long-term savings.
Ethereum Co-Founder’s Tips For Choosing Guardians
In a related post on Reddit, Buterin expanded on his thoughts about choosing guardians for multisig and social recovery wallets. He emphasized the importance of selecting guardians who are reliable, trustworthy, and unlikely to collude to steal your money.
He also suggested minimizing correlations between guardians and ensuring they ask a security question before approving any operation.
Buterin further explained that it is acceptable to have some of your own devices act as guardians, but having too many is not recommended. Having at least one guardian as a wallet on your device is natural, but having more than one increases the risk of centralizing power.
Therefore, it’s important to have enough guardians controlled by others so that if you are absent, there are still enough guardians to retrieve your funds.
Although multisig wallets are secure, Buterin believes that social recovery wallets are more convenient, especially with the emergence of ERC-4337 account abstraction and user-friendly wallets such as Soul Wallet.
Social recovery wallets require a single key for transaction signing, but if that key is lost, a group of keys held by other individuals can be used to restore access to your funds.
Nevertheless, Ethereum co-founder believes that self-custody is important, and social recovery and multisig wallets are a great way to achieve it. While multisig wallets are a safe way to store funds, social recovery wallets are much easier to use and ideal for hot wallets.
Choosing the right guardians for your wallets is crucial, and Buterin suggests minimizing correlations between your guardians and ensuring that they ask a security question before approving an operation.
Related Reading | Ethereum: Playboy Reports Loss Of Nearly $5M On NFT Earnings
