Bitcoin wallets may one day come in a thousand different styles and sizes, and have just as many functionalities, but when you boil it all down there are three core traits that must be addressed;
Security; Keeping your coins safe from all types of attack.
Simplicity; Making it so user-friendly that everyone's grandmother can figure it out.
Privacy; Stopping people from attaching your name to your transactions.
It is often debated if a single wallet can ever be truly perfect in all three areas at the same time. Zooko's triangle defined three desirable traits for a network protocol, and described how a protocol can have only two attributes at the same time. In exclusive interviews with BraveNewCoin, leaders at four of the top Bitcoin wallet companies were asked if Zooko’s triangle could be applied to a Bitcoin wallet, can a wallet balance all three traits, and what would the result look like.
Lawrence Nahum, CEO of the innovate multisignature wallet platform Greenaddress, believes that it is impossible for all three traits to be perfect at the same time. He points out how difficult the balance is to get right, “This kind of work is really hard, you have to be very careful with any change to make sure people don’t lose money by using the wallet. But if you make the system too complicated by trying to secure it ‘too much’ you may get a wallet that nobody uses.”
“Balancing the triangle for the average user is hard, especially if you also want to cater for high end and pro or technical users. You could also simply end up in too much security. While that doesn’t cause users to avoid the wallet, it still results in many people losing their funds because they forgot the password they used to encrypt something, or to back up, or they lost a device, or they formatted their drive or phone.”
- Lawrence Nahum, Greenaddress CEO
Community Manager for the ever popular mobile wallet Mycelium, Dmitry Murashchik, sees these problems resolving as the tech matures, and focused on our culture of embracing technology. “Now we have people (at least younger generations) being really tied to their phones, taking them with them wherever they go. Being so tied to the phone, together with the new security features included in them - such as fingerprint scanners and TEE modules - makes them very good security and authenticity devices. At the same time, phone wallet apps are improving simplicity, though point and scan is already pretty simple, and improving privacy, such as support for Tor, and future plans on CoinJoin implementation.”
“As long as you watch your phone constantly, always keep it with you, and wallet developers keep pushing for more privacy features while maintaining usability, I think that triangle won't be a problem.”
- Dmitry Murashchik, Mycelium Community Manager
Architect of the Trezor hardware wallet and originator of Slush's mining pool, Marek Palatinus, agrees the current situation is temporary, “It is very difficult to combine all three of these conditions to achieve the perfect balance.”
“One size never fits all and even in real life a customer would not go into a brick and mortar shop with a vault full of their life savings.”
- Marek "Slush" Palatinus, Trezor wallet Architect
Meanwhile the COO of security focused web wallet Gem, Ken Miller, points out that it's only a matter of achieving optimal acceptance, “Companies are always striving to improve their simplicity and ease of use. Apple is the gold standard on ease and even they are constantly working to improve simplicity. Meanwhile, when you think of security it works much the same. I don’t have ‘perfect’ security with my bank, it’s probably more like ‘pretty good’.” Miller added, “I wish my bank were better with my security, and the constant compromises of card databases is pretty disturbing, but the security has been good enough that I keep using a bank. Bitcoin wallets will work much the same, where an optimally acceptable synergy of security, simplicity, and privacy will be expected, and the beauty is there is an opportunity to do them all even better than what we’re used to.”
“For wallets to become trusted and adopted in a mainstream way, I would replace ‘perfect’ with ‘optimally acceptable.’ It’s tough to have perfect simplicity”
- Ken Miller, Gem COO
All four experts expressed an opinion that the most popular wallets in the future will be cloud-based services for the sake of simplicity. “The Gmail of wallets,” was a phrase suggested independently by several of them. They all agreed that both perfect Security and perfect Simplicity are achievable, the only issue they did not agree on is how much privacy could be included in a wallet with perfect simplicity.
Trezor's wallet already has support for the anonymity network TOR built into it, so unsurprisingly Palatinus was the most optimistic about adding privacy to the mix.
“I am sure that sooner or later we will see wallets with the perfect balance of simplicity for users and hidden high-security features available to the more technologically-savvy users.”
Mycelium's Murashchik feels there is a multisignature-address-based solution to this problem, “I expect the future would probably be multi-sig style wallets, where security is shared between a user and a centralized company. The problem with that is that multi-sig doesn't work too well for privacy. Hopefully we'll have a solution.”
Meanwhile, Greenaddress' CEO Nahum suggested that much like today, privacy-centric wallets may stay completely separate from the more popular line of wallets. “The majority of people may use a dead-simple wallet, gmail like, very easy to use. While others will choose to run independent privacy centric wallets and or full nodes.”
When asked exactly what the ideal future wallet would look like there was considerably less consensus. All four experts had primary wallet features they expect to see, solving different problems. Gem's Miller had the most direct answer, clearly framing his vision for the ideal payment device, “It will be a software based wallet accessible from any device anywhere — mobile phone, tablet, PC, watch, and so on...that is more secure and easier to use than any payment instrument we use today.”
Mycelium's Murashchick had a similar answer but suggested a completely different platform might be underneath it.
“In the future, instead of the device being a phone that also does other things including bitcoin, it will be a dedicated secure cryptographic signing device (used for bitcoin, identity, etc.), that also has an app to let you make phone calls.”
Trezor Architect Palatinus agreed with the others on the likelihood of a mobile software platform, “The future Bitcoin wallet will be some kind of a mobile or smartwatch app. It will enable easy 1-tap Bitcoin payments as well as secure and easy recovery options if something goes wrong with the device itself.”
“Companies are trying to develop a combination of mobile and secure wallets, but in practice, most of them are only giving a false sense of security to their users. A false sense of security is the biggest issue with most of the wallets on the market today.”
However Greenaddress' Nahum feels there could still be Bitcoin transactions that we haven’t seen yet. Something else, not discussed here at all, could be the driving force behind the shape of wallets yet to come.“Perhaps we won’t even use bitcoin as we use it today, perhaps we will use it instead as a settlement platform and use things like Lightening networks to pay on a regular basis.”
“You can also imagine users will probably have dials of ‘privacy’ vs ‘cost’ and that the privacy implications and or solutions will change if the majority of the transaction run on these networks. One thing's for sure, for those that don’t want to use an IOU wallet, bitcoin keys/seeds management will be paramount.”