A multi-signature wallet is a wallet where a transaction must be approved by several other participants when a transaction is sent. They store parts of the key for signing transactions. Wallets with the possibility of “social key recovery” are also being prepared – in this case, the owner of the wallet keeps the key himself, but if it is lost, the key can be restored with the help of several custodians.
In essence, custodians are several other wallets or addresses that are controlled by other people and organizations. Buterin emphasized that the recruitment of custodians should be decentralized. That is, it does not make much sense to make several wallets on your own computers – one is quite acceptable, but no more.
“One of the most important rules for me is the existence of a sufficient number of keepers of parts of my key so that if I disappear, they can restore access to my funds,” Vitalik Buterin wrote.
Also, the co-founder of Ethereum noted that the custodians, preferably, should not know each other. And it is important to come up with a special way to confirm that you are the one sending the transaction. For example, a secret phrase, according to which the keeper of part of your key will understand that it is you who are sending the transaction, and not a hacker who has gained access to your computer.
One Reddit user wrote that 5 of his ex-girlfriends hold parts of his multisig wallet key.
Buterin noted that sometimes the speed of signing transactions is important, especially for people who often use decentralized protocols and exchanges. These people need custodians who can respond quickly and sign transactions. Even for hodlers, it’s important to periodically send transactions to test their custodians to make sure the whole system is working and custodians haven’t forgotten or abandoned their accounts.
Recently, a book by Vitalik Buterin “More money. What is Ethereum and how blockchain is changing the world. The book is devoted to the history of the development of the second blockchain in terms of capitalization.
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