What will destroy Bitcoin? Governments? Hackers? Winklevoss twins?
Problem 1. High Price of Error
Imagine your grandma is transferring her life savings to a better, hardware purse designed for seniors.
Now imagine she scans the wrong QR number:
- Either because she is old and has bad vision
- Or due to the cold she caught the other day.
Let’s stop our story here. We need a better future for your grandma, and for the rest of the humanity too.
Solution 1, impossible in Bitcoin: Use the protection codes (found in WebMoney and other electronic currencies). Recipient must enter this code to get the coins, otherwise, they will revert back in 3 days.
Result: if you copy and pasted a wrong wallet number, you’ll see your coins back soon.
Would you use the protection codes? Y/N
Problem 2. Lack of Undo
This problem has existed for a long time. Once, one of us wanted to send $1000 to someone’s credit card, but sent it to his friend instead. It was last day of their friendship.
Bitcoin has never solved this problem. Actually, they’ve made it worse. Once you send your coins to a wrong wallet, you’re out of luck. They’re gone.
A solution, impossible in Bitcoin: a smart contract allowing a 3rd party authority to rule it back for a fixed fee.
A half-assed solution, existing one: Bitcoin vaults. When users attempt to send the coins, they are locked for 24 hours.
In theory, in case of a mistake, the real owner of the coins has a chance to check their email and cancel the transfer.
In reality, it’s a pain for legit transactions and even more notification spam.
Problem 3. Ugly Addresses
I used to live in a small town where the phone numbers consisted of 5 digits. I used to memorize the phone numbers of all my friends.
When phonebooks and email addresses came into being, I believed in a brighter future. At least for a second.
Then blockchain came, giving us a tough choice between QR codes and hash codes.
In particular, Bitcoin IDs are worse than other computer-generated IDs:
- IBAN account numbers
- Social security numbers
- License plates
And of course, they are worse than human-generated IDs, such as:
- email addresses
- Skype logins
- name/DOB/place of birth combinations
Solution 1, existing one: Vanity addresses. One can generate slightly personalized addresses:
1BTC24yVKQdQNAa4vX71xLUC5A8Za7Rr71 (watch the first six characters)
Solution 2, impossible in Bitcoin: Blockchain needs some kind of name system similar to DNS. We need some way to translate the human-world IDs to the hash numbers and vice versa.
In the meantime, we have some hints:
- Use QR codes wherever possible
- When copying the addresses, check the first or last digits or the hash.
In fact, the interfaces can highlight them:
Problem 4. Poor Response Rate
Transactions are slow. The whole existence of transaction accelerators proves that point.
Jakob Nielsen defines the response time limits like this:
- 0.1 second is about the limit for having the user feel that the system is reacting instantaneously.
- 1.0 second is about the limit for the user’s flow of thought to stay uninterrupted.
- 10 seconds is about the limit for keeping the user’s attention.
If the delay is longer than 10 seconds users switch to other browser tabs, other apps, or other activities like picking their nose.
Solution 1: Proof of stake currencies. It’s not something we have readily available though.
Solution 2: This requires a different form of a repository than blockchain. Like tangle. Initially, tangle was developed for the Internet of Things: renting bikes, managing the traffic lights, ̶b̶u̶y̶i̶n̶g̶ ̶f̶a̶n̶c̶y̶ ̶c̶a̶t̶s̶. Needless to say, it requires faster communication than blockchain.
An example of cryptocurrency that utilizes tangle is IOTA.
What would it be an ideal cryptocurrency?
Problem 5. Lack of Trust
Blockchain is developed with zero trust in mind. It treats all transfers with the same high level of trust. These transfers have the same level of security:
A transfer between my own accounts
A transfer to my drug dealer.
The problem with “everything has the highest security level” is it means “everything the lowest security level.” People learn to avoid all the annoying prompts without reading.
Solution: various levels of security for our wallets. Transfers to my own wallet must be fast.
Of course, there are many more usability problems.
Long fractions? Welcome to the brave new world:
Volatility? I won’t even start here.
Future of Bitcoin
Blockchain is a revolution, but not without problems of all kinds. The only way these technical problems will be solved is by the community collaborating together. And we think that usability is the key for the wide adoption of Bitcoin.
If we need the future of Bitcoin, we need to improve its usability.
The future is usability.
About the Authors
Ivan Braun, founder of Icons8. UX designers use the free icons, photos, and music that match each other, making UX instantly clean.
Dmitry Ufaev, founder of BitFin Capital. BitFin Capital is an index fund of 7 cryptocurrencies with monthly rebalancing.