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This wallet must have integrated private transaction and identity functions.
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Among other capabilities, it should function as an encrypted privacy bank for the user.
Vitalik Buterin, founder and developer of Ethereum, described in an article of his own pen the qualities and properties that an ideal Cryptocurrency wallet should have. The article, which was published on December 3, 2024, stated that cryptoasset wallets are one of the most important technological products, but most neglected by the developer community. Although many of the optimizations he proposes do not yet exist or are in development, his article serves as a useful decalogue that helps to understand the most appropriate and advanced properties that a cryptocurrency wallet should have.
He purpose of publicationin the developer’s own words, was to provide his “own vision of some of the properties that an ideal Ethereum wallet would have.” He commented that, broadly speaking, this wallet reflects their Bitcoin-criptografia-satoshi-nakamoto-privacidad-assange-may-hughes/” target=”_blank” rel=”noreferrer noopener”>inclinations cypherpunk and is focused on the security and privacy of cryptocurrencies.
Buterin gave his own definition of a wallet before going on to define the technical and design characteristics that an ideal version should possess:
Wallets are the window between a user and the Ethereum world, and a user only benefits from any decentralization, censorship resistance, security, privacy, or other properties that Ethereum and its applications offer to the extent that the wallet itself does as well. have these properties.
Vitalik Buterin, founder and developer of Ethereum.
Interoperability between second layers (L2)
For Vitalik Buterincryptocurrency wallets should support integrated and easy sending between different L2s. This would make it possible for users to send funds to specific addresses automatically and, above all, no matter which chain the funds are initially on.
For this, the cryptocurrency wallets They must be able to allow requesting payments and deposits to specific chains. To do this, they must handle addresses that include metadata from the receipt chain. To send a transaction from Arbitrum to Optimism, both second layer networks of Ethereum, it would be enough to enter the following address in the sender and click send: 0xd8dA6BF26964aF9D7eEd9e03E53415D37aA96045@optimism.eth).
In short, these wallets must be able to move funds from one second layer to another through explicit and dedicated addresses. “When someone (or some app) gives you an address in this format, you should be able to paste it into the ‘to’ field of a wallet and click ‘send.’ The wallet should automatically process that shipment in any way possible,” Buterin commented.
Security with “social recovery” and multi-signature functions
For the founder of Ethereum, the security section of a cryptocurrency wallet must be able to “(i) protect the user from the wallet developer being hacked or malicious, and (ii) protect the user from their own mistakes. ”.
Their preferred response to the two problems listed are “social recovery” functions with multisignature functions.
Social recovery is a wallet design model that works with shared keys. These accounts have a primary key in the hands of the main user, and an N number of guardian keys in the possession of other people, such as friends and family. The application of a greater number of these keys when executing actions with the wallet will allow more complex and higher value transactions to be carried out.
The primary key can perform non-financial and low-value operations. Most gatekeepers are required to perform (i) high-value operations, such as sending all account value, or (ii) change the primary key or any of the gatekeepers. If desired, the primary key can be allowed to perform high-value operations with a temporary lock.
Vitalik Buterin, founder and developer of Ethereum.
Wallets should make life easier for new users
These security functions, in principle technically advanced, should be configurable by new and inexperienced users who use this ideal Vitalik wallet.
New users won’t want to have to enter a large number of guardian keys on their first experience. Therefore, wallets should offer them a very simple option.
Vitalik Buterin, founder and developer of Ethereum.
The simple route he proposes is a multisig that allows the wallet to be executed with 2 of 3 signatures using zk-email (an email service focused on security and privacy), a key stored locally on the user’s device and a backup key in power of the wallet provider, which may work through a third-party application.
In-app wallets are inevitable, because apps trying to attract non-crypto users don’t want the confusing user experience of asking them to download two new apps (the app itself, plus an Ethereum wallet) at the same time. .
Vitalik Buterin, founder and developer of Ethereum.
The founder of Ethereum Additionally, consider that wallet developers They should continue their efforts to help users with the detection of fake addresses, phishing, scams, and other external threats. although he thinks that there is no magical, unique solution to these problems.
Wallets should have built-in privacy features
Vitalik thinks it’s time for Ethereum to get serious about more advanced privacy solutions, such as ZK-SNARK. Your ideal wallet would be able to host private transfers directly integrated into users’ wallets.
Until now, making private transfers on Ethereum required users to explicitly download and use a “private wallet,” such as Railway (or Umbra for hidden addresses).
Vitalik Buterin, founder and developer of Ethereum.
To prevent the normal user from having to make this detour in order to enjoy private fund transfers, Buterin recommends a solution that he considers simple to integrate into his ideal wallet: “you will be able to store a part of a user’s assets as a ‘private balance’. ‘ in a private fund. When a user makes a transfer, it would automatically be withdrawn from the private fund first. If a user needs to receive funds, the wallet could automatically generate a hidden address.”
Another way that the developer sees as plausible to apply in his ideal wallet is this: that said wallet allows generating new addresses for each application connected to the wallet. This would provide the wallet imagined by Vitalik with the ability to reduce the traceability of operations while protecting the user’s identity.
Buterin points out that this ideal wallet should integrate privacy functions that not only apply to asset transfers, but also to the user’s identity. Above all, in a digital environment where human identification mechanisms They are becoming more frequent. “A native ecosystem of multiple accounts per user helps achieve this,” the developer suggested in his writing.
Cryptocurrency wallets and data wallets
Wallets must become not only software for storing on-chain access permissions, but also software for storing your private data. This is something the non-crypto world is increasingly recognizing as well.
Vitalik Buterin, founder and developer of Ethereum.
According to Vitalik, your ideal wallet, capable of being efficient in terms of privacy, It would also be a bank of private data stored Blockchain-cadena-bloques/” target=”_blank” rel=”noreferrer noopener”>off the chain. This wallet must, therefore, guarantee both the control of access permissions and the accessibility and non-disclosure of private data.
Cryptocurrency wallets as “privacy banks” are explained because the cryptography and security solutions used today for transactions could also be used to protect individuals’ data on the internet.
Most people’s data on the web is in unencrypted states, making it more vulnerable to attack by hackers and malicious actors. According to Buterin, then, a cryptocurrency wallet must protect both the funds and the identity of the individual.
Secure chain access
The ideal Vitalik wallet needs standardized light clients for layers one and two that directly verify the consensus of the ledger on the network (blockchain).
This is contrary to current practices, where wallet developers rely on RPC providers (Remote Procedure Call) to get information about the stringwhich implies at least two vulnerabilities:
i) The RPC provider could try to steal money by providing false information, for example about market prices. ii) The RPC provider could extract private information about the applications and other accounts a user interacts with.
Vitalik Buterin, founder and developer of Ethereum.
Private Information Retrieval (PIR) is a thin client-like solution, which can address these vulnerabilities, but would require optimization for this.
PIR works with a server that maintains a copy of all the data. A client sends an encrypted request, and the server performs a calculation on the data and returns it encrypted with the client’s key. It does not reveal to the server what specific data it requested, which contributes to the privacy of the user and the chain’s information access system.
Security of decentralized applications
The weakest link in a user’s security is usually decentralized applications. Most of the time, a user interacts with an application by accessing a website, which implicitly downloads the user interface code in real time from a server and then executes it in the browser. If the server or DNS is hacked, the user will get a fake copy of the interface.
Vitalik Buterin, founder and developer of Ethereum.
To solve this problem with his ideal wallet, Buterin suggests that access to these decentralized applications be done within the functional limitations of the chain. Users would access a decentralized application (dapps) via their Ethereum Service Name (ENS), for example, and any interface updates to these dapps would require an on-chain transaction from a multisig or a decentralized autonomous organization (DAO).
Additionally, this wallet would allow dapp developers and firms to pay a bonus to users affected by a hacked or fraudulent dapp. Wallets could display a user score based on bonus size.
Finally, Buterin’s ideal wallet, or at least a more futuristic model of it, would incorporate in its design advances in three important technological areas: artificial intelligence, brain-computer interfaces (such as Neuralink) and programs that defend the user against ads, trackers, viruses and online threats.
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