Around half a million crypto users are active in the world. At the generousest estimate, just 2.5% of them are actually using cryptocurrency. hardware wallets. This is a very small number. I’m glad it’s lower.
Why? It’s because I want billions of people to adopt Bitcoin and to have everyone in secure self-custody. Consumer hardware wallets are one of the greatest obstacles in achieving this. And not just to Bitcoin adoption: the whole decentralization revolution is at risk if we don’t address the fatal flaw at the heart of the world’s most popular wallets.
Money is treading on water
Lucien Bourdon, who celebrated his birthday in this issue last year.10 years of the wallet revolution“. A lot of what you say I concur with. But there’s one thing that is glaringly missing. Almost without exception, the ‘leading’ consumer hardware wallets on the market today have barely innovated in a decade. As every security expert is aware, it’s impossible to stay ahead of the curve if one does not keep on improving.
Bitcoin is rapidly changing its use cases. Bitcoin and other cryptocurrencies are no longer ‘just’ stores of value; they are now a medium for all kinds of increasingly complex transactions. The underlying hardware technology of the wallets is virtually unchanged since their days as secure offline keysafes. This is also true for the UX. Users are expected to write out their seed word and then stare at a small screen each time they wish to approve a purchase.
The problem is not limited to Bitcoin. In the future, cryptographic keys will protect all of our sensitive and valuable data. In fact, the whole decentralized economy depends on what’s inside these wallets – so let’s take a peek.
Trust, Don’t Verify?
Lucien’s right when he said that Bitcoin is strong because of its dedication to open-source principles. He is wrong in his assertion that Open-Source has become a standard for all software. “most of the wallet industry”.
It is a fact that the most popular hardware wallets are still built using proprietary, closed-source systems, which users can’t fully inspect. They can’t check if they don’t have the ability to inspect. If users can’t confirm, then why trust manufacturers?
Why are there so many wallets? “black boxes” is because they have something to hide – like the decades-old smart card technology used by so many of the wallets to which bitcoiners entrust their keys. This tech isn’t fit for today’s crypto use cases, and certainly not for a future of decentralized security, where we’ll need keys to safeguard everything from our digital identities to access credentials.
A Barrier to Innovation…and Adoption
Hardware wallets that rely on proprietary, closed systems are not only a nightmare for security: they’re also bad news for Bitcoin adoption and innovation.
Today’s wallets are effectively walled gardens, where developers must follow restrictive rules and can’t offer any degree of customization for users. It’s not just a case of control freakery; it is often a result of the technology. Ledger devices need to allow every app to access the master seed. This means that they must be carefully reviewed and approved before being released.
If the App Store was like that, then we would still have Nokia 3310s in our pocket. We got an open ecosystem, a vibrant developer community, competition and a multitude of great apps.
What I would like to see in wallets. If developers are allowed to build without permission, not only will they be able deliver enhanced functionality and user experience but also play a crucial role in wallets evolution, they can support (and secure!) the ever-growing sophistication of bitcoin applications.
The wallet should serve as a center of innovation and a platform for developers to create killer applications that encourage people to use Bitcoins and other blockchain-based technologies. Ledger, in reality is an ecosystem that will be the catalyst for adoption of Bitcoin and blockchain-based services. “anti-App Store”Holding back innovation decentralized instead of driving forward.
Your Wallet is Open
Transparency is the solution, and it’s simple. To ensure the security of cryptographic key storage devices, they must adhere to the same principle as encryption. Security researchers, software developers and individual users can audit and validate security measures using open-source hardware. This reduces reliance on manufacturer’s claims, increasing trust.
Existed already newer and more secure alternatives. Hardware wallets that are based on microkernel open-source architectures offer a stronger security foundation and allow independent verification. This system ensures that there is no one company controlling the security of the cryptographic keys of the users, thus reducing hidden vulnerabilities.
Only one out of 40 crypto-users owns a physical wallet. Let’s make sure we give the other 39 a truly secure way to self-custody their digital future – and support the innovation that will attract billions more to adopt.
Zach Herbert has written a guest article. The opinions expressed by Zach Herbert are theirs alone and not those of BTC Inc. or Bitcoin Magazine.
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Source: bitcoinmagazine.com
