With concerns about cryptocurrency theft growing, Ethereum co-founder Vitalik Buterin has stressed that accidental losses, such as forgotten passwords or lost devices, pose just as great a risk as hacks. He argued that the current focus on preventing theft should extend to protecting users from their own mistakes.
In a blog post on February 28, Buterin called for social recovery as a viable solution, where users rely on a network of trusted guardians to restore access to their wallets, rather than relying solely on loseable recovery phrases.
Some wallets, such as Argent Wallet, use smart contracts to implement this system, while Nanny Wallet is touting itself as the first wallet to offer full social recovery. These solutions aim to provide a safer and more reliable way for users who might otherwise suffer irrecoverable losses.
The need for these tools is highlighted by stories like that of James Howells, who lost 8,000 bitcoins after accidentally throwing away his hard drive in 2013 and is still trying to recover them today. This famous incident and others like it illustrate the seriousness of losing access to digital assets without the possibility of recovery.
Developing more advanced security tools is crucial to help users protect their digital assets, not only from hackers, but also from human errors that can lead to catastrophic losses. Therefore, moving towards wallets that rely on social recovery systems or other technologies such as multi-factor authentication and secure storage could be the ideal solution to address this ongoing challenge.
