Thefts and losses are some of the major barriers to the mass adoption of cryptocurrencies. Every year millions of dollars are lost to scammers, hackers, and wallet security exploits. No wallet is 100% secure despite the marketing pitches of some hardware wallet manufacturers.
Ledger users have suffered badly in recent months following the massive data breach from company servers. Hardware wallets can and have been emptied and the company has done very little to recompense its customers or even investigate these thefts.
Better security solutions are desperately needed, and Buterin thinks social recovery wallets are a step in the right direction.
What is a Social Recovery Wallet?
A newer type of smart contract wallet called a social recovery wallet can potentially provide a high level of security and much better usability than previous options.
Buterin acknowledges that hardware wallets are not the solution as users must rely on the company that manufactures them. They continue to be a magnet for hackers and scammers and are still a single point of failure.
“The ratio of funds stolen to number of devices compromised is very high.”
Multi-signature wallets are one step towards better security but social