As Michal “Mehow” Pospieszalski, a seasoned tech leader with years of experience in the crypto world, I firmly believe that human-readable addresses are the key to unlocking mass adoption for digital assets. My journey in this industry has taught me that simplicity and security are paramount when it comes to onboarding new users.
Many crypto innovators are fond of sharing their achievements. They often claim that their blockchain, system, or application has the potential to attract the following billion users, ultimately making digital assets an integral part of everyday transactions for all of us.
However, if you delve deeper into the matter, it won’t take long to discern that much of this appears inflated or exaggerated. This is due to the fact that numerous projects share the same problems that have hindered broad acceptance over the last ten years: a persistent shortage of user-friendliness.
As an analyst, I’ve noticed that approximately 0.4% of crypto users have claimed their domain through Unstoppable Domains over the past few years. It’s not due to a lack of interest, but rather a consequence of suboptimal user experience and inadequate security concerns. In these platforms, anyone can effortlessly access a user’s balance and transaction history just by knowing their username. This apparent privacy gap seems to be the primary reason why neither Unstoppable Domains, friend.tech, nor Mastercard Crypto Credential have managed to penetrate the mainstream market.
Numerous surveys consistently reveal the reasons why ordinary people hesitate to invest in cryptocurrency. Constantly exposed to news about large-scale hacks and unscrupulous individuals, they express doubts about whether these businesses are capable of safeguarding their funds securely. Despite the fact that many transactions with merchants and family members are free in traditional finance, the idea of paying transaction fees is a significant deterrent. After all, why migrate to a new technology that will end up costing you extra money?
When newcomers explore crypto websites, they often encounter an overwhelming amount of technical terms such as zk-SNARKs, liquidity pools, and degens, to name a few. Adding to the confusion are terms like DAOs. Unfortunately, many platforms make things overly complex, leading beginners to feel that they’re reading a foreign language.
As an analyst, I’ve observed that the user experience significantly influences our interaction with various platforms. Users of Web2 are accustomed to accomplishing tasks swiftly with minimal clicks, often without needing advanced coding knowledge. Even tech-savvy individuals find Web3 platforms unnecessarily complex, which can lead to a disappointing first impression as newcomers become frustrated and disengage due to the complexity.
When you consolidate everything, it becomes evident that cryptocurrencies face clear challenges: intricacies in the design of blockchains overshadow the potent advantages they provide, such as decentralization, censorship resistance, and financial inclusivity. One significant obstacle in overcoming all the barriers we’ve mentioned is alphanumeric wallet addresses.
Addressing the issue
As a researcher, I’ve noticed that Bitcoin addresses, consisting of 34 random alphanumeric characters, can be quite challenging to remember and are susceptible to errors. For instance, in a study conducted back in 2014 with 75 participants, it was found that the longer these alphanumeric strings were, the higher the rate of mistakes when participants were asked to input them without assistance. Common blunders included capitalizing letters incorrectly, leaving out characters, and even rearranging them in the wrong order.
Ponder on this: If errors can slip in while typing a mere sequence of eight letters and numbers, imagine the potential for errors when the sequence is four times as long!
Missing a single character can have disastrous ramifications when a crypto payment is being made. In all cases, if the wallet accepts the bad address, funds are lost forever. Double-checking an address and scouring for mistakes is also easier said than done, with a slew of letters and numbers blending together into one decipherable bunch. This is why savvy crypto typically sends their crypto addresses via an encrypted chat to the sending party, and then they request the sender to send a test transaction for a small amount just in case the sender gets the address wrong. Once the test transaction goes through, the rest of the funds can presumably flow to the same address. You must send an encrypted message with the correct recipient address in the smoothest instance of the proper process. The sender sends a test, the recipient confirms it, and then the sender sends the main amount. The address also has to be correct for the crypto being sent. Ethereum (ETH) addresses don’t work for Bitcoin (BTC) payments (again, total loss if you get this wrong).
The answer to all of this is simple yet staggeringly underutilized. Crypto users should be able to send to a human-readable name instead of a jumble of digits and characters. That name should also not reveal to the world how much money the owner of the name has. The user should be able to simply post their name anywhere, like a PayPal, Zelle, Venmo ID/QR code, and receive any crypto funds on any chain without hackers being able to divine how much funds were received. Crypto will never reach the same level of adoption as TradFi until it implements the privacy consumers are used to and, ideally, does everything TradFi does, only better. Human-readable addresses can be thought of as the new digital real estate of web3. Just as owning property grants you an address, those names can carry real utility, unlike NFTs, empowering users with a unique identifier for seamless crypto transactions, digital assets ownership, and SSI.
In terms of security measures, detecting instances of address spoofing frauds, where crooks trick innocent users, might become more straightforward. Typically, these cybercriminals create wallet addresses that closely resemble those a victim has previously interacted with, leading the user to unwittingly transfer funds to an undesired location.
This approach doesn’t depend on any Personal Identifiable Information (PII) for its operation or address calculation, ensuring it operates in a fully decentralized manner, thus reducing potential security vulnerabilities.
Making digital asset addresses user-friendly would significantly enhance usability, allowing consumers to reap the benefits effortlessly. This user-friendly approach is likely to spark increased curiosity, leading to more people engaging in transactions. Consequently, this growing interest will foster a network effect, as an increasing number of users participate and interact within the system.
A good start—but what next?
The crypto industry may not wish to admit this, but human-readable addresses would only be the first step on a long roadmap to achieving mass adoption.
The idea that account abstraction simplifies blockchains by allowing funds to be managed via smart contracts has been widely praised. However, it’s worth noting that this approach offers a degree of customization but comes with complexities during implementation and potential security risks. Moreover, there could be additional costs for the end users.
Besides the current issue, there are more complications that need attention. At present, account abstraction is limited to Ethereum, yet many cryptocurrency enthusiasts utilize a variety of other networks. The problem of blockchain fragmentation is escalating, and because most wallets are designed for individual ecosystems, they can’t interact with each other. This leaves users with few options other than using complex bridges if they want to transfer assets between platforms.
Essential measures for enhancing security involve adopting multi-party computations and employing Hardware Security Modules (HSMs). These protective mechanisms serve as additional shields for safeguarding user assets, simultaneously making it extremely challenging for cybercriminals to infiltrate.
For digital assets to reach their full potential, blockchains, web3, and crypto platforms must strive for greatness. To do this effectively, developers should display courage, revisit their designs, and consider the user experience from the perspective of newcomers who have no prior experience with tokens. Only then can they credibly claim to be able to welcome the next billion users.
Michal “Mehow” Pospieszalski is an experienced technology leader who has a history of creating groundbreaking crypto solutions. In his roles as CTO and co-founder of SwissFortress, and as CEO, co-founder, and co-inventor of MatterFi, Michal combines innovative thinking with practical technical expertise to drive both companies forward, shaping the future of digital asset management.
Read More
Sorry. No data so far.
2024-08-28 14:14