The co-founder Ethereum Vitalik Buterin underlined the urgent need for improved portfolio safety solutions to reduce crypto losses caused by inaccessible funds.
On February 28, Buterin shared his concerns on X, stressing that many lost crypto came from the users locked by their wallets rather than theft.
Buterin said:
“There are also a lot of people who have lost huge amounts of crypto to * loss * rather than theft. Software bug, Forgotten password, lost device, Burnt paper wallet in the Fire, device upgraded without saving data…. Many ways to happen. »»
He also underlined a key challenge insofar as investors who lose access to their funds often have no one to hold responsible. He thinks that many choose to remain silent by embarrassment, which still complicates the problem.
Buterin’s comment draws more attention to a significant risk of self -sufficiency in the potential for loss of permanent assets.
Although the auto-pustody protects users from exchange failures and protocol hacks, this also puts them at the risk of losing their assets due to a human error or a technical failure. Without guarantees, investors can permanently lose access to their assets.
Recent figures illustrate the extent of the problem. A January report from River estimated that around 1.6 million bitcoins – more than $ 1.5 billion at the time – had become inaccessible due to self -management. This amount exceeds 1.2 million BTCs estimated in incidents related to exchanges.
Social recovery solution
Given this, Buterin has urged the cryptographic industry to prioritize the safety innovations of portfolios which protect users against these irreversible losses.
According to him:
“The really robust portfolio safety solutions that our ecosystem must build should also take into account the loss. (This is a large part of the reason why I talk so much about social recovery!). »»
Buterin has promoted social recovery portfolios since 2021. This method uses a multi-signature system, allowing designated tutors to help users find access to their funds.
Social recovery portfolios work like regular portfolios, with a single key signature transaction. However, if users lose access, they may request that their guards authorize a transaction to update the signature key.
Buterin stressed that this approach is balanced decentralization with improved safety and reduces the risk of theft and permanent loss.
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