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Cardano Ecosystem

Paribus

10/14/2023

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Wallets as Portals

While there’s usually a strong focus on projects becoming cross-chain, an often overlooked aspect of interoperability is wallet development.

Wallets as Portals

While there’s usually a strong focus on projects becoming cross-chain, an often overlooked aspect of interoperability is wallet development. During the last bull run, newcomers were daunted by the technical hurdles in storing crypto and confused by the need to have multiple wallets for different tokens.

This barrier to self-custody is one of the main reasons many opted to keep their coins on centralized exchanges. Within one account, they could easily store multiple types of tokens from different chains, moving them around quickly and easily.

In stark contrast, self-custody entailed juggling a multitude of wallets, each with its unique security protocols and compatibility with hardware wallets. Under such circumstances, it is hardly surprising that centralized exchanges continued to dominate the market.

Multi-chain compatibility is an issue one of our advisors, Jack Rousian, has spent a lot of time researching and implementing with wallet design. He explains, “Multi-chain must be part of your vision, strategy, and roadmap. As the blockchain ecosystem diversifies and matures, users and projects are spread across various networks, each offering unique advantages and capabilities.”

He continues, “Having a multi-chain orientation isn’t just a feature; it’s a philosophy that should permeate the very core of your strategy and vision. As blockchain horizons expand, so do the clusters of users and projects. Each chain unfolds its own narrative, rich in unique features and advantages.”

Having a broader vision of the role of wallets is essential in preparing for the next wave of new users that come into the space. Jack says, “The wallet isn’t just a keeper of assets but a portal. Whether novices or enthusiasts, users seek a unified experience where they can effortlessly interact across different protocols. This interoperability is more than convenience — it’s empowerment, allowing for seamless cross-chain transactions and operations.”

Crucially, the daunting learning curve associated with managing private keys within wallets plays a pivotal role in determining the adoption of self-custody by new users. The fear of forgetting or losing these keys looms large.

Jack’s passion in this area is unmistakable, “Simplifying the ‘onboarding and management of keys’ for new novice users is one of the biggest challenges. While it’s tempting to focus on scalability or how these wallets integrate with the numerous decentralized applications out there, the crux of the issue is more fundamental: it’s all about managing recovery phrases and private keys.”

This endeavor inherently balances security against usability, a trade-off honed by the traditional financial system over decades of experience. The conventional banking world leans on centralization and ample margins to balance this equilibrium. In contrast, replicating comparable levels of user-friendliness and security within a decentralized and permissionless landscape presents a far more formidable task.

Various methods exist to secure a user’s private keys, encompassing social recovery, multi-party computation, and hardware security modules, each adorned with unique virtues and vices. This complexity is amplified when considering the knowledge level required to use them effectively.

Jack explains, “With all these advances, it seems like the technology is getting more complex. Doesn’t that make it harder for the average person to use? Spot on! That’s the ongoing challenge for wallet providers.”

He summarizes the problem perfectly, “It’s a dance between making something Fort Knox-level secure while ensuring my grandma can still use it without pulling her hair out. Achieving that balance between security and usability is crucial if we want cryptocurrency to become mainstream.”

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Disclaimer: Cardano Feed is a Decentralized News Aggregator that enables journalists, influencers, editors, publishers, websites and community members to share news about the Cardano Ecosystem. User must always do their own research and none of those articles are financial advices. The content is for informational purposes only and does not necessarily reflect our opinion.


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