Billionaire and Ethereum (ETH) creator Vitalik Buterin is highlighting what he thinks is the best way for users to self custody their crypto. In a new Reddit post, Buterin says that using multisigs, plus what he calls “guardians” or a network of trusted devices or individuals, is his preferred method of crypto security. A multisig […]
The post Ethereum (ETH) Creator Vitalik Buterin Outlines Favorite Crypto Security Strategy appeared first on The Daily Hodl.
In a Reddit post, Buterin emphasized that having too much of a concentrated grasp of your self-custody wallets can be a bad thing if you get “hacked, coerced, or incapacitated or die.”
Ethereum co-founder Vitalik Buterin has emphasized the importance of having a varied set of “guardians” to maximize the safety of crypto asset self-custody via multisig and social recovery wallets.
Given the ever-growing rate of crypto scams and hacks over the past few years, and several major crypto firms going bust in 2022, the importance of self-custody and maintaining sufficient wallet safety procedures has never been more important.
In a March 16 Reddit post on the r/ethereum community titled “How I think about choosing guardians for multsig and social recovery wallets, Buterin gave a detailed run down of how he approaches wallet security.
Self-custody is important. And social recovery and multisig is a great way to do it.
— vitalik.eth (@VitalikButerin) March 17, 2023
A quick reddit post on how I think about choosing guardians for social recovery and multisig wallets:https://t.co/FY1iyJ6BFC
While their structures differ, Multisig wallets and social recovery wallets both rely on guardians, which essentially serve as external sources to recover funds or approve transactions. Generally, Guardians can be sets of external wallets belonging to the same individual, or addresses controlled by other people/entities.
According to Buterin, it’s important to decentralize wallet guardians, as owning more than one of your guardians provides a “tricky tradeoff: you get to trust other people less, but you're also concentrating more power into yourself, which can create a risk if you get hacked, coerced, or incapacitated or die.”
“My rule of thumb is that enough guardians should be controlled by other people that if you disappear there are enough other guardians left to recover your funds.”
Buterin went on to advise that someone’s set of guardians should not know of each other, as this “greatly reduces the risk that they collude” to attack their wallets and assets, however they should still be able to find each other in the case of something happening to the wallet owner.
“If something happens to you, they will still be able to find each other, because there are obvious standard protocols that naturally come to people's minds in such a situation (eg. contact your family),” he wrote.
Additionally, the Ethereum co-founder suggested that people should “instruct guardians to ask a security question” that only they and the guardian will know when confirming an operation, and only confirm when the correct answer is given.
Related: DeFi sees its biggest hack in 2023 as Euler loses $197M: Finance Redefined
For degen traders, or those not making long term HODL plays, the Ethereum co-founder also stressed that they should use guardians that can respond quickly to suit their fast moving needs.
“If you're doing degen stuff with on-chain contracts, you may need to act quickly: pull money out if a contract gets a vulnerability, move money around if you are close to being liquidated, etc. If your needs include this, then you want to find guardians who can act quickly on short notice.”
Finally, Buterin recommended testing each guardian at least once a year, as this will confirm that they “haven't forgotten or lost their accounts.”
Given the ever-growing rate of crypto scammers and hacks over the past few years, and several crypto firms going bust last year, the importance of maintaining sufficient wallet safety procedures has never been more important.
Ethereum founder Vitalik Buterin is once again on the move, sending hundreds of Ethereum (ETH) to a major US-based digital asset exchange. Blockchain security firm Peckshield initially spotted the transfer and revealed that a wallet owned by Buterin shifted 200 ETH worth over $323,000 to a wallet of unknown origin. The ETH trove was subsequently […]
The post Ethereum Creator Vitalik Buterin Sends 200 ETH to Crypto Exchange Kraken: PeckShield appeared first on The Daily Hodl.
It’s been a turbulent week in finance with the so-called crypto-friendly Silvergate Bank announcing its liquidation, U.S. Senator Elizabeth Warren blaming the event on “crypto risk,” and individuals on social media pointing out that Warren is “terribly misinformed.” Additionally, U.S. Regulators closed Silicon Valley Bank after reports of a bank run and other troubles. In […]
A blockchain-tracking platform says that one trader has netted more than 1,300% profit on a Shiba Inu (SHIB) imitator. According to Lookonchain, when Ethereum (ETH) founder Vitalik Buterin sold Shikoku (SHIK) this week, the transaction triggered an arbitrage opportunity. “Due to Vitalik Buterin selling SHIK yesterday, a SmartMoney made ~96ETH ($150,000) with 14 ETH on […]
The post Trader Pockets 1,393% Profit in Minutes on Shiba Inu Imitator After Vitalik Buterin Triggers Arbitrage Opportunity appeared first on The Daily Hodl.
On March 7, onchain observers noticed that Vitalik Buterin, the co-founder of Ethereum, had allegedly sold billions and trillions of airdropped ERC20 tokens, resulting in a gain of an estimated $700,000 in value. The market liquidity of the airdropped tokens was shallow, and the relatively unknown ERC20 tokens plummeted in value after Buterin reportedly sold […]
A leading blockchain tracking firm says Ethereum (ETH) creator Vitalik Buterin is selling all his free meme coins that he was gifted. According to data from Lookonchain, Buterin recently sold $693,000 worth of meme tokens Mops (MOPS), Cult DAO (CULT) and Shikoku (SHIK). “vitalik.eth (@VitalikButerin) is selling his free sh**coins. Currently sold 50billion MOPS for 1.25 $ETH($2K), […]
The post Ethereum Creator Vitalik Buterin Nets Nearly $700,000 As Billionaire Sells All His Free Memecoins: On-Chain Data appeared first on The Daily Hodl.
Vitalik Buterin thinks the Ethereum (ETH) user experience (UX) still needs to improve significantly, especially regarding transaction inclusion. The Ethereum creator says in a new blog that “simple and robust” user interfaces (UI) are preferable to “fancy and sleek ones.” “Good user experience is not about the average case, it is about the worst case. […]
The post Vitalik Buterin Says More Needs To Be Done To Improve Ethereum’s (ETH) User Experience appeared first on The Daily Hodl.
The long awaited account abstraction standard was believed to be many months off, but will be launched in a surprise announcement at WalletCon in Denver.
Smart accounts, enabled by the launch of the new ERC-4337 standard, are now available on Ethereum and are expected to help mainstream adoption by finally making crypto user friendly.
Ethereum Foundation security researcher Yoav Weiss will make the surprise announcement at WalletCon in Denver today that the core contracts for ERC-4337 — known by blockchain developers as “account abstraction” — have passed an audit by Open Zeppelin and will be made available on every Ethereum Virtual Machine (EVM) compatible network including Polygon, Optimism, Arbitrum, BNB Smart Chain, Avalanche and Gnosis Chain.
New users will no longer need to learn about complicated seed phrases or the technical process of setting up a wallet to onboard into the decentralized world of crypto, Weiss told Cointelegraph.
“The next billion users are not going to write 12 words on a piece of paper. Normal people don’t do that,” he said. “We need to give them better usability, they shouldn’t need to think about cryptographic keys.”
"EIP-4337 is going to take a year or whatever" - @sashaaldrick of @gelatonetwork
— John Rising (@johnrising_) February 25, 2023
You're in for a big surprise
Account abstraction also enables the unique cryptographic keys used for cryptocurrency to be stored on standard smartphone security modules, upgrading them to de facto hardware wallets. However the screen remains a security issue compared with traditional hardware wallets and gas costs could be prohibitive on mainnet initially — although other EVM chains and Layer 2s have low enough fees to make it viable.
It also enables the use of two-factor authentication; signing transactions on your phone using a fingerprint or face-scan; the setting of monthly spending limits on an account; and the use of session keys to play blockchain games without constantly having to approve transactions.
Users who lose their phone or device can use time-locked social recovery of their account via a group of trusted friends or even a commercial service. Weiss said:
“It gives you the same features a bank would without having to trust a bank.”
The standard has been in development for two years with the team funded via grants from the Ethereum Foundation. While similar functionality is available on smart contract wallets from Argent and Gnosis, these solutions require centralized components called relays to pay gas fees whereas ERC-4337 decentralizes the entire system.
Weiss was one of the lead authors of Etherum Improvement Proposal (EIP) 4337 alongside Ethereum co-founder Vitalik Buterin and five others. He said Buterin had first posted about the concept nine years ago "before Ethereum even launched, it has taken us this long to get here."
There have been numerous proposals to enable account abstraction prior to this but all required a difficult hard fork of Ethereum, and took a back seat to more pressing upgrades like the Merge. ERC-4337 is an alternate approach that makes use of decentralized infrastructure called “bundlers.”
Account abstraction is extremely powerful.
— John Rising (@johnrising_) February 25, 2023
Here are a few of the things you can do to make the most of it: pic.twitter.com/jWavGLzBhE
In very simple terms, the process works like this: a smart wallet signs a “user operation” which gets fired to a special mempool, which is basically just an organized queue of transactions (albeit a different queue than Ethereum’s normal mempool).
Bundlers are like miners or validators, taking user operations from the mempool and delivering the desired result back to the wallet. The bundlers also pay for the gas (transaction fee) required and are compensated by the user’s contract account or by a third party known as a “paymaster.” This could be a decentralized application (DApp) or it could be a wallet provider.
The first production grade bundler to be deployed on mainnet is from wallet and infrastructure provider Stackup, but more will be available soon. “It’s permissionless; anyone can run a bundler,” says Weiss. “It’s not censorable.”
Smart accounts, or account abstraction, is shaping up as a key theme for crypto in 2023. The technology has already been incorporated natively into zk-Rollup layer 2 solutions from StarkWare and zkSync and Visa designed an automated crypto bill payment system that makes use of it.
Related: Visa dreams up plans to let you auto-pay bills from your crypto wallet
John Rising, the co-founder of Stackup, tweeted this week that an added advantage of account abstraction is that projects can use plain and easily understood language to onboard new users rather than arcane technical terms.
“Because the contract handles the esoteric blockchain stuff, you don’t have to use words like ‘gas’ or ‘nonce’ to accurately describe what’s happening. This is a huge win for crypto adoption and security.”
"Good user experience is not about the average case, it is about the worst case," wrote the Ethereum co-founder.
In a new blog post published on Feb. 28, Ethereum (ETH) co-founder Vitalik Buterin documented the continued need to improve the namesake network to better facilitate ETH as a means of payment. In one instance, Buterin shared how he tried to pay for tea for himself and friends at a coffee shop in Argentina in 2021, but had to pay 0.01 ETH (around $40 at the time) as that was the minimum deposit for the owner's exchange account. "I did not mind the 3x overpayment and treated it as a tip," the co-founder wrote.
In another instance, Buterin explained how how he tried to pay for tea at another location in 2022, but two separate transactions failed due to requiring "extra gas to process the transfer" and a UI glitch in his mobile wallet. Furthermore, Buterin also raised the issue of unpredictable transaction times, writing:
"Many times, there has been a surprisingly long time delay between my transaction getting accepted on-chain, and the service acknowledging the transaction, even as "unconfirmed." Some of those times, I definitely got worried that there was some glitch with the payment system on their side."
As told by Buterin, outliers nevertheless remain on the Ethereum network despite recent improvements. "If you send a transaction at the same time as when many others are sending transactions and the base fee is spiking up, you risk the base fee going too high and your transaction not getting accepted," he wrote. "Even worse, wallet UIs suck at showing this. There are no big red flashing alerts, and very little clear indication of what you're supposed to do to solve this problem." Buterin added that even experts can be confused at how to speed up transactions in such cases.
"A UI that is clean and sleek, but does some weird and unexplainable thing 0.723% of the time that causes big problems, is worse than a UI that exposes more gritty details to the user but at least makes it easier to understand what's going on and fix any problem that does arise."
Among other issues, Buterin raised the problem of the internet being "not 100% reliable," and the need for possible offline proofs that customers indeed transfered their transaction data directly to the merchant. Another issue raised was "losing a small amount of BTC and ETH," due to secret-sharing-based off-chain social recovery methods for wallets, which Buterin deemed as fragile. According to YCharts, Ethereum transaction fees have fallen to an average of $0.656 at the time of publication, which is much lower than the average of $20 witnessed during the peak of the crypto bull market in 2021.
"Along with the all-important issue of high transaction fees due to scaling not yet being fully solved, user experience is a key reason why many Ethereum users, especially in the Global South, often opt for centralized solutions instead of on-chain decentralized alternatives that keep power in the hands of the user and their friends and family or local community."
