A timeframe to accept crypto is no different than for other types of payments. Credit card’s first usage was 100 years after the idea, and Europeans printed money 600 years after China. Furthermore, the antique markets traded without coin for 5000 years.
In the case of cryptocurrencies, the logical conclusion is that the timeframe will be shorter. However, can we identify the usual catalyst for the new type of payment acceptance?
Seemingly, safety was always the first in the hierarchy of needs. Although blockchain is the most advanced form of cryptography, hackers’ attacks are regular. In 2018 alone, crypto wallet hacking counted more than $1B worth of cryptocurrencies.
Not the depth, but the security of the wallet will determine the moment when the world will fully accept cryptocurrencies. Until secure, the crypto wallet would not replace the leather one. It is interesting to notice that creating a leather crypto wallet is also possible.
If the material is irrelevant, what feature is essential for these wallets? Besides safety, can better user experience drive people to accept cryptocurrencies?
Is Safety a Catalyst for Crypto Acceptance?
Imagine the leather as a form of a crypto wallet. After all, this crypto wallet is no more than a unique string of characters on the piece of leather. If someone is accepting some cryptocurrency from this wallet, the code will change.
Even when on leather, the name would be the “paper wallet.” As information about your funds is offline, it belongs to the group of “cold wallets.” That makes it safe from online attacks. However, if someone embezzled funds, no one would know before reprinting or checking online.
To conclude, as the difference in the security from online attack goes, we have two types:
- Cold Storage – As mentioned, the paper wallet uses this offline model. For some, it is convenient to store private keys on the USB device rather than paper. When an offline source creates a code, it is a matter of preference where you will store the data. Trezor is the first cold crypto wallet, initially only for Bitcoin. Nowadays, it stores Ethereum and Stellar based coins, too.
- Hot Wallet – Different than previous, hot crypto wallets connects to the online source. Unlike cold storage, losing the password does not mean that you will lose your funds. More similar to banking apps, every hosted wallet is “hot,” and most prone to hacker attacks.
By the various reports, hackers took over $1B in cryptocurrencies in 2018 alone. In the case of Japanese exchange Coincheck, hackers’ prey counted $532 million.
On the other hand, cold wallets leave room for fraudulent activities. One example is the mysterious death of Quadriga CX CEO. Allegedly, the owner took to his grave the access code to holdings of 76,000 users. By the latest report of Ernst & Young, total holdings were $106 million in Crypto and $55 million in fiat holdings.
Is User Experience a Catalyst for Crypto Acceptance?
Similar to our ancestors facing coins, paper, or plastics, the majority is not familiar with cryptocurrencies. As in its infancy stage, the user experience for both cold and hot wallets is far from easy. Since setting up a crypto wallet is not a “turn-key” solution, it requires a few steps.
Tech companies are helping overcome this obstacle by embracing new technology. Like investors in blockchain game Cryptokitties. Samsung included crypto wallet in its S10 phone. Their first choice was an Ethereum wallet as the Ethereum platform is behind Cryptokitties.
However, as of July 2019, Samsung is integrating another wallet into the Samsung S10. This time, the new wallet includes the most popular cryptos. Following the announcement of May 2019, Samsung is also adding crypto wallets in its budget phones.
Another obstacle is the speed of transactions as it is not even close to those of the payment cards. By no means unreliable, the Ethereum platform crashed during the Cryptokitties fever in 2017.
Regardless of this failure, in 80 days starting from April 2019, Samsung sold 1 million S10 5G phones. Seemingly, Samsung S10 sales can reach 40 million units. In other words, the same number of people will have instant access to a crypto wallet.
In contrast to Ethereum support, Samsung S10 didn’t include two of the most popular Ethereum wallets – Mist and Metamask.
Тhe people behind Ethereum built Mist, which is an Ethereum wallet client. Users of Mist control their funds by the excellent and user-friendly interface.
On the other hand, Metamask is very hard to set up. At the same time, users are paying to speed up the transactions. Consequently, the main obstacle of higher acceptance of blockchain games lies in Metamask’s usage.
Since adding crypto wallets to phones is easy, it leaves space for other, faster platforms.
The Catalyst as the Mix of Two
What could differentiate is going to be improved transaction speed combined with bulletproof security. As many blockchain projects follow a lean approach, convenient use will come over time. Under those circumstances, some crypto wallets include an additional layer of protection:
- Two-factor (2FA), where the system generates new codes every few seconds.
- Multi-signature making one key for the platform, one for the user, and one key that user and platform share.
One of the Stellar crypto wallets that have both is Bitfoilex as a solution for both beginners and connoisseurs. The rapid growth of the user base (currently 866,000 users) is the testimony of their user-friendly experience. With Bitfoilex, users can store Bitcoin, Ether, Bitcoin Cash, Stellar, and proprietary Traxalt Token.
Another Stellar wallet, Mobius, raised $39.5M in its ICO (initial coin offering). As their official page claims, Mobius transactions take seconds without fees. Comparing it to Ethereum’s 50 minutes and $0.70 in fees for $100 – it is a tremendous improvement.
Conclusion
As fraudulent activities are imminent to payments, the security will have its challenges. First coins in 6 century BC had specified weight and balance of gold and silver. It is because of criminals that were using different metals in coin minting. Not to mention paper money as an organized crime favorite.
Not long ago, the Slovenian branch of the first credit card provider cheated 80,000 of its users. In the case of Quadriga CX, former co-founder committed a credit cards fraud back in 2005.
Thus, taking a closer look at the man behind solutions is of utmost importance. If we exclude Bitcoin as the founder is unknown, we have a few reliable platforms left. Although it suffered the hacking attack and lags in solving its issues, Ethereum is the most popular due to co-founder’s charisma.
Similarly, the man behind Stellar also created Ripple as one of the high-ranked platforms. If Stellar keeps its promise of fast transactions, solutions built on this platform could be game-changers.
Therefore, Stellar will dominate if it solves both the security and the user experience issues. At least, it will be a stepping stone for future alterations of the blockchain technology. Hopefully, these improvements will secure worldwide acceptance.