The UX of cryptocurrency wallets and key storage are not solved problems. With the current system users are stuck between, on the one hand, trusting all of their funds to third parties in the form of exchanges and internet-connected "hot wallets", and the extreme personal responsibility of managing keys themselves on the other. The result is millions of dollars worth of funds lost to unscrupulous and inapt third parties and user error. If cryptocurrencies are to be adopted by the general public, as opposed to a small group of enthusiasts a better user experience is required.
By storing currencies in a contract rather than a regular account we could attach custom logic to fund management. For example:
- Daily limits on transfers.
- Team management of funds with a system of security checks.
- Various key recovery protocols.
- Lists of trusted recipients.
- Time delays and notification for large transactions.
A contract storing funds and implementing any number of security features and protocols is a Contract Wallet. The domain has seen development recently and multiple wallets targeting different use cases are being developed. But we believe the domain is still in its infancy. For example it is hard to imagine the wallets being trustworthy enough to see wide adoption without the contracts and off-chain third-party mechanisms being thoroughly audited and, ideally, open sourced. All of the wallets tested so far are in beta and are either short on features or with buggy interfaces.
All of that said, we are very optimistic about the future of Contract Wallets as a fund storage mechanism and we will observe the progress with great enthusiasm.
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