From a historical point of view, 12 years is only a blink of an eye, but it is eternal in the scientific and technological world. Look at the mobile phone, in less than ten years, it has become an absolute necessity from a niche accessory. However, new technologies do not always develop rapidly. For example, it took a quarter of a century for washing machines to reach half of the households in the United States.
This year’s Halloween marked the 12th anniversary of Satoshi Nakamoto’s Bitcoin white paper. In this short period of time, Bitcoin has changed the way we think about money, but it is still a long way from large-scale applications. So, what is hindering the development of Bitcoin?
Problem: User Experience (UX)
In my opinion, there is no doubt that user experience (UX) has always been the single biggest obstacle to Bitcoin adoption, but it is not as simple as you think.
User experience (UX) is cunning: in different contexts, it means different things to different people. For example, for Bitcoin, the user experience goes far beyond exchanges or wallets. Since we are talking about people’s investment, security is a crucial consideration in any discussion about user experience.
Bitcoin has a usability problem, and it cannot be solved simply with a new interface. This is not a technical problem, but a human error, that is, the assumption that it is safer to store coins in exchanges than in their own custody. This kind of error cannot be solved by a new user interface (UI). It requires a revolution in the way we think about Bitcoin security.
In the early days, a bad user experience was not important, because the Bitcoin platform was mainly used by traders and speculators who had technical capabilities and could manage complexity. But when ordinary people started to get involved in Bitcoin, many exchanges and trading platforms focused their attention on developing a “consumer-level” user experience. However, ironically, this is also the moment when Bitcoin user experience problems really arise.
What is wrong with all this?
It is not that we did not expect such a thing to happen. The world’s first high-profile hacking incident, Mt.Gox in 2014, caused 24,000 people to lose everything. But in the next six years, we have continued to go in the wrong direction on security issues. There are countless incidents like exchange bankruptcy, hacking attacks, or OKEx in October, when the main person in charge was detained by law enforcement agencies and lost access to customer keys. For reasons of space, I won’t elaborate here. .
CipherTrace, a blockchain analysis company, found that in the first half of 2020 alone, crypto investors lost nearly $1.4 billion worth of cryptocurrency, most of which were due to hacking of exchanges. What’s more, some The exchange even committed fraud against customers. So, where is the problem?
(Because) this industry does not allow everyone to easily and intuitively hold their own private keys, but focuses on providing consumers with a convenient “full-service” experience, that is, every link is controlled by a third party, including the private key custody.
For first-time users, this may be a good starting point, as it can prevent users from making very basic security mistakes. But this will still expose you to a series of threats inside and outside the exchange.
Despite these well-known risks, the industry as a whole has not turned its attention to developing standard solutions to address this blank basic security flaw. To a large extent, it is because this allows platform customers to continue to deposit coins in the exchange, and the exchange can profit from it.
Make security easy
Early Bitcoin user experience work focused on the surface issues, while ignoring the deep issues of helping users control private keys. They believe that a solid user experience that allows users to control their private keys is an unwinnable battle, so they avoid it.
Although this is understandable, I think it is a mistake. The whole spirit of Bitcoin is based on the concept of empowerment, that is, to become your own bank, control your own savings, and control your own financial destiny. But in trying to perfect the user experience of non-technical customers, exchanges and custodial wallets have (perhaps unknowingly) hindered self-sovereignty and opened the door to third-party risks. It’s hard to imagine a worse experience than losing every Satoshi invested in.
The control of private keys by friendly end users is the holy grail to solve the Bitcoin user experience, but it is also a problem that the industry basically avoids.
Therefore, although many new Bitcoin users face a steep learning curve, they are not aware of the inapplicability of the old security model. For example, if you lose your private key, you cannot retrieve it through “password reset”, and you will lose these coins forever. This partly explains why exchanges are so keen to control the entire experience, including custody.
Sacrificing safety and pursuing ease of use is a wrong choice. We should not underestimate this challenge, whether it is from a technical perspective or a design perspective. It is entirely possible for users to easily keep their private keys and combine high security with an excellent user experience. The more difficult task is to educate the public who purchase coins and let them understand why self-custody is so important. And this is completely within the capabilities of our industry, as long as we give it the priority it requires.
In the next ten years, Bitcoin will follow one of two trajectories: Either it will be adopted like a mobile phone, or it will slowly rise like a washing machine. It all depends on how we quickly solve Bitcoin’s biggest user experience challenge, which is to make self-custody easy.
