People, Protocols & Private Keys π
Wallets are about to go through a few transition phases & I am trying to map out where I see things heading. I hope that this post serves as a document for debate and new ideas.
Wallets are becoming the most important piece of software to many people around the world. We are moving our financial, social, cultural & political assets onto Ethereum.
The standards are set: ERC20, ENS, NFT & DAO
I keep trying to focus on the next million people to move assets off an exchange and onto a wallet. They have exposure to crypto, but they are not a user of it. That is our target market to begin with.
Secret Recovery Phrases
AKA Seeds, Mnemonics, Keystores, Private Keys
In Metamask and Ledger, there is this concept of a derived wallet. This is a wallet that is linked to a seed phrase (AKA secret recovery phrase). You can think of it as a single key that can open multiple locks to different homes. Your seed phrase can generate an infinite number of Ethereum addresses.
This can really confuse new people because the concept of a SECRET RECOVERY PHRASE is mixed with the terms Account, Password & Wallet. People are grasping for analogies when they enter this new system but they find none.
This is how it functions at a high level:
How Ethereum Networks Work
Layer 2 Networks are making the inner workings of Ethereum faster & harder to understand
To add to the complexity, there are now dozens of Ethereum-based networks that a wallet can connect to. The most popular ones are Polygon, Optimism & Arbitrum. This is why you are starting to see these common interface patterns pop up in wallets & dapps:
This means that we have these two fairly esoteric concepts being mushed together inside most wallets: derived accounts & network layers. It is hard!
Walletβs Today: Power Tools for Developers
This is the lay of the land for an advanced for Ethereum user. They have secret recovery phrases that generate a few wallets (or accounts) and manage tokens on multiple Layer 2 networks. This is getting really complex, really quickly.
Wallets Tomorrow: Get People Onto Layer 2
The simpler model is to have 1 seed phrase <> 1 wallet address. A lot of mobile wallets do this (Examples: Trust, Alpha & Rainbow). This drastically reduces the complexity of the interface and keeps the conceptual models simpler.
The next hurdle they are all trying to cross is the idea of multiple networks. Communicating to someone the current state of their connection to a blockchain is absolutely crucial as you slide between the Ethereum base chain and the Layers built on top of it.
Walletsβ Future: Fast Layer 2 Tools Accessible to All
It feels like a lot of peopleβs Ethereum activity is never going to touch Layer 1 in the not-too-distant future. It is simply going to be far too expensive.
This reduces so much of the complexity required to master the interface. We can keep a single recovery phrase, a single wallet, and a single network.
Of course, there will always be the option and the need to explore the complexity tree. I am just trying to articulate what I think the state of wallets is going to look like for most people in the future.
They will be using a few dapps on a couple of protocols with a single wallet. It will be useful enough to them to download a wallet and start playing.
How can we show people what is going on?
I am still exploring what we can do to make the underlying reality very clear to people
We are just at the begging of the mobile multi-chain wallet exploration process. There is so much digital space to explore. I keep thinking about how to make this as obvious as possible to people. Here is one of the many throwaway concepts I have had rattling around my head:
I think this is one path to a larger user base for dapps.
What do you think?
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ric.eth
I want a process so straightforward I don't even need to understand what a layer 2 is or the functions of the layer tree. I should be able to login to my wallet with Face ID and interact with dapps so smoothly I don't know the mechanics of why it is affordable and how it moves between different levels of blockchain interaction. I want to use it because it is easier and better than what I use for my assets now.
Richard, I want to understand why you chose to build your wallet on Safari? I read an earlier blog post that it's because of Apple's commitment to privacy. However, are you worried about Apple's tendency to build closed ecosystems and they don't really seem fond of contributing towards open source code?
In my opinion, the best option is to build something on the open web that works on Chrome/Firefox/Brave etc.?
I'm curious to hear what you think about that?
A big fan of all your work and writings over the years btw. Please keep up the great work!