One of the major challenges of designing and building in the crypto space is that we’re used to thinking in money paradigms, like wallet.
A version of this article was first published by Dana J. Wright on Medium.
One of the major challenges of designing and building in the crypto space is that we’re used to thinking in money paradigms, like wallet. This is extremely limiting, considering the thing you’re referring to today as your “wallet” will soon become the passport to your entire online experience.
The wallet concept was somewhat okay when we were only dealing with cryptocurrency but if we’re to believe the promise of Web3, your wallet will soon be more like your golden ticket online.
It will be the key that unlocks everything about you: your finances, health, property, interests, preferences, contacts, your inventory, your access, your permissions and your status.
And you alone will control it.
No more walled gardens owned by centralized monopolies. You will own all your stuff and take it all with you as you bop around online.
Assuming that’s true…
We the designers and developers pushing this massive evolution of the internet need to recognize something: The crypto “wallet” was deeply flawed from the very beginning.
Check out my video of Andreas speaking to a bunch of bitcoin developers back in 2014 (in some basement somewhere in the Mission):
I’ll give you a moment to get past the fact that there was someone who understood crypto so well in 2014.
The point he made back then is more relevant today than ever: Crypto wallets don’t really have anything in them. They never have. The coins are on the blockchain. The wallet contains only keys.
When you realize this, you’re half way to understanding why “wallet” was truly such a terrible name for this mechanism.
What he says next is pretty mind blowing when you think about how it maps to today. Back when he gave this talk, the number of bitcoin wallets in existence could be counted on one hand: Electrum, Armory, Trezor, BitPay, and Blockchain.info. And they were all non custodial.
Each implementation was a bit different, but fundamentally they all had the same data:
Public and private key pairs
Human readable things like labels
Today there are thousands of crypto wallets and probably hundreds of thousands of blockchains. Wallets like Metamask, Coinbase and Binance live in your browser and facilitate access to your funds as well as a growing list of other stuff that we’ll get into later.
And yet the same basic data structures remain. The keys in the “wallet” are presented on a blockchain in order to “create encumbrances.” Or put another way, to satisfy the programatic conditions that must be met in order to access your stuff.
There is nothing inside the wallet. It simply “unlocks” your stuff.