The creator of Ethereum, Vitalik Buterin, has underlined the significance of self-custody for protecting digital assets. In a recent Reddit post, he outlines how multi-signature solutions and social recovery might aid in this attempt.
Multi-signature wallets, he argues, safeguard assets from being lost due to a centralized body. By utilizing this kind of crypto wallet, users may benefit from safe custody without being exclusively in charge of security procedures.
He emphasized that multi-sig wallets are more secure than single-key wallets as they require several signatures to approve a transaction. This is because an attacker needs to compromise numerous keys to gain access to the funds.
Multisig wallets are commonly used for cold storage or high-value transactions, where the extra security is worth the effort of using several signatures.
SOCIAL RECOVERY WALLETS CAN ALSO BE HELPFUL IN SELF-CUSTODY
He stressed further that social recovery wallets are similar to multi-sig wallets in that they enable the use of a single key to sign transactions with the extra security of being able to recover cash in the event that the key is lost using a collection of other keys.
Vitalik Buterin Explains How Multisig is the Best Way to Self-Custody
According to him, social recovery wallets are considerably less difficult to use than multisig wallets, particularly in light of the popularity of ERC-4337 account abstraction and emerging wallets like Soul Wallet that will make the technology more friendly.
The upcoming Soul Wallet, which Vitalik Buterin referenced, recently secured $3 million from Ethereum developers and venture capitalists to create the Ethereum wallet, which is supported by the ERC-4337 standard.
🎉🚀Breaking News: We’ve Raised $3M!🚀🎉 pic.twitter.com/Mnrq0ohzrG
— Soul Wallet (@soulwallet_eth) March 16, 2023
According to Soul, the ERC-4337 standard offers decentralized bundler service, simple gas payment, greater security features, and improved transaction scheduling, all of which contribute to a superior user experience for both DeFi experts and rookies.
Nevertheless, Vitalik Buterin pointed out that social recovery wallets employ a single key for transactions, allowing recovery if the key is lost or compromised. This is accomplished through the use of a group of guardians who may collectively authorize a recovery procedure.
Social recovery wallets are frequently used for internet-connected hot wallets and day-to-day transactions.
These wallets provide an additional layer of security by allowing trusted friends or family members to help recover lost or stolen funds. This feature makes them an attractive option for those who prioritize security in their cryptocurrency transactions.