By now you've probably heard, seen, or read about crypto's promise of a world where the powerful people in society don't control the financial system. To many, crypto promises to rebuild the current structure into an egalitarian financial system.
A lot of progress has been made since Bitcoin was first launched in 2009. The advent of smart contracts, for example, gives well-known public blockchains like Ethereum, Solana, and others the ability to trade tokens using spot, futures, options, and the like. There are decentralized social media and decentralized public infrastructure (like public WiFi) that these smart contract capabilities enable. Many talented software and web developers are being funded by lots of capital to create changes in this space.
Read more: What Is Bitcoin (BTC)?
At the moment, however, there are many landmines. For example, many crypto digital wallets still require people to save 12- or 24-word sequences as a backup restoration file just to rebuild their wallets if they get compromised.
Another issue arises if you send some tokens, which could be worth hundreds of thousands if not millions of dollars, to someone using the wrong address or wrong network. For example, if the recipient wallet is supposedly 0xabcdefgh12345 on Ethereum but you mistype one of the characters in that address, your nightmare begins. In many instances, the funds could be lost forever.
To people who are new to crypto, these scenarios are unacceptable because they are used to a world where banks and other financial institutions are ready to step in to help them. Unfortunately in the crypto world, when you make a mistake, it could turn out to be fatal.
The situation is getting better. For example, crypto users often send to wallets whose addresses are a long string of alphanumeric numbers and letters like 0xabc123 with many characters like this:
"0xA1bCd2eFGh3jkL5m51r24xc4b1255wTA6C31xw4y"
Hackers and scammers may fool some people into thinking that a similar address with one of the characters changed is the same wallet, but it is not. Unfortunately we humans are not really able to detect that unless we have the time to check each character. It's not user-friendly, to say the least. Fortunately, you can also use the QR code of the recipient wallet instead to prevent mistyping one of the characters.
Or you can have the right wallet address of your desired recipient, but you used the wrong network to send it. Guess what, you may still lose that crypto because it doesn't arrive at the intended wallet.
Read more: Best Cryptocurrencies to Invest In
There are also a fair number of hacks that are still going on, both technically savvy ones and some that are more social-based. For example, most people would probably expect that the @WhiteHouse Twitter/X account will not ask you for money and assume that it got hacked if it did, but a small number of people might still fall for the scam.
There is a lot of improvement needed to make crypto more user-friendly and error-proof to the point that it would be impossible to make a mistake. If developers do not do this, we cannot expect that the promise of a free and fair financial system based on crypto will become a practical reality soon as too many people will complain about lost or stolen funds.
Techies and nerds might use it, but the rest of the world will not.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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