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Ethereum co-founder Vitalik Buterin has expressed his concerns regarding the risks associated with relying solely on hardware wallets to secure cryptocurrencies. In his statement, Buterin stated that cryptocurrency users should look for alternatives.

His speech was not contrary to the use of hardware wallets, but rather critical of a dependence on them. In fact, Buterin cited risks inherent to these wallets that could cause the total and permanent loss of cryptocurrencies.

On the other hand, the developer emphasized the importance of decentralizing security measures and recommended the use of multi-signature configurations (multisig) as a safer alternative. Buterin himself stated that he protects his cryptocurrencies this way.

“I use multisig (insurance) for over 90% of my personal funds,” said Buterin. At the same time, he recommended that people adopt this method as a security alternative.

Multisig involves distributing a wallet’s private keys among multiple parties. Some keys remain with the owner of the cryptocurrencies and the rest remain with trusted individuals, for example. To carry out transactions in the portfolio, you must have the signatures of at least two people

Buterin emphasized the need to avoid revealing the identities of these individuals to each other, emphasizing the importance of decentralizing one’s own security. But his talk also raised warnings about the risks of multisig, which involve trusting third parties.

Alert on hardware wallets

Buterin’s speech began during an online debate regarding the security of cryptocurrency self-custody. One of the individuals participating in the debate recommended the use of hardware wallets as a critical security measure for protecting cryptocurrencies.

Proponents of hardware wallets have highlighted their ability to mitigate the devastating consequences of losing funds due to malicious activity. As they are not connected to the Internet, a hacker cannot break into these wallets and steal the cryptocurrencies that are stored there.

In the debate, many people encouraged users to invest in hardware wallets, set them up securely, and transfer most of their funds to these devices. But another group expressed fear of depending exclusively on these wallets.

It was precisely these dissenting voices that supported Buterin’s preventive advice. According to them, the main concern revolved around the user becoming their biggest risk.

Potential pitfalls cited included the possibility of losing seed phrases or inadvertently compromising access to funds. To address these concerns, proponents of alternative security methods, such as multisig configurations, have reiterated the importance of diversifying security measures.

They echoed Buterin’s recommendation to distribute keys among trusted parties to mitigate the risk of single points of failure. In short, create complementary ways to protect your cryptocurrencies and not just depend on the wallets themselves.

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