Complicated Seed Phrases Hinder Web3 Adoption, Expert Says

With cryptocurrency evolving each day, Web3 technology is proving to be the needed grace to transform the digital space. However, there is a big hindrance to this, which is complicated seed phrases that are deterring mainstream adoption.  Seed phrases, also known as recovery phrases, are a sequence of 12–24 random words that serve as a master key to a cryptocurrency wallet. Even though they offer a secure way of backing up your crypto wallet, they are making it difficult for many crypto enthusiasts to embrace Web3 technologies.

At the recent Web3 Summit 2024 in Berlin, Germany, Bumblefudge, the janitor-in-chief at the Chain Agnostic Standards Alliance (CASA), shared that there needs to be change. In his keynote address, Bumblefudge stated, “Seed phrases won’t be practical for the other 95% of the world. The solution, unfortunately, lies in boring, ugly standards and governance.”

He believes the problems with the current system of seed phrases are daunting, which is why there needs to be a solution. Unfortunately, Bumblefudge is convinced that the solutions are not pleasant.

Setting up a Web3 wallet is a complicated process that requires users to handle native gas tokens and unrecoverable seed phrases, which is a big put-off for newbies.  For cryptocurrency to be popular, wallets and decentralized applications (DApps) must gradually develop to offer more user-centric features. Bumblefudge maintained the need of the industry to abandon the current model and prioritize ease of use for everyday people.

However, creating a more user-friendly model is much more difficult than it seems. It requires experts from various industries to come together and work as a team. According to Bumblefudge, wallet providers have been reluctant to adopt common standards because of the fierce competition with each other. For this reason, the development of interoperable and secure solutions, such as passkeys that are user friendly, has been difficult.

“We need to be going down to the user instead of up from what the chain wants and what the DeFi protocol wants,” Bumblefudge explained. “We need standards for user expectations.”

Other industry experts agree with Bumblefudge’s sentiments. In fact, Chintan Turakhia, senior director of engineering at Coinbase, also stressed the importance of removing friction from the crypto onboarding process.  His company recently fulfilled this pledge by launching a smart wallet designed with beginner-friendly features, replacing complex seed phrases with simpler account names and passcodes.

Ultimately, the success of Web3 solutions will depend on addressing the challenges with seed phrases. Industry leaders must focus on enhancing user experience by creating more intuitive and user-friendly wallet solutions to fully harness blockchain technology’s potential and make it accessible to users globally.

As Web3 applications become more user friendly to the ordinary person on the street, entities that are incorporating these new technologies, such as Horizon Fintex, will likely have an easier time getting more people to embrace their offerings in the years to come.

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