Vitalik Buterin Reflects on Cryptocurrency Payment Failures and the Need for Better UX

Vitalik posted an article discussing the failure experience of cryptocurrency payments, long delays, the need for a better UI, and better forms of account abstraction to remove the need for centralized or even federated relays, and commoditize the relaying role. In his article, Vitalik describes his personal experiences with cryptocurrency payments, highlighting some of the challenges and failures he has faced while making transactions.

Vitalik Buterin

Vitalik’s article provides an interesting perspective on the current state of cryptocurrency payments. In it, he shares his experiences from as far back as 2013 when he went to a sushi restaurant in San Francisco that accepted bitcoin for payments. Despite having heard about this, his initial transaction did not go through, and he had to walk over 50 meters to the Internet Archive nearby to access its wifi, which finally allowed him to send the transaction. Vitalik’s experience highlights the importance of having in-person payment systems that allow customers to transfer their transaction data directly to the merchant when the internet is not reliable.

In 2021, Vitalik attempted to pay for tea for himself and his friends at a coffee shop in Argentina. The owner recognized him and showed him that he had an account at a cryptocurrency exchange. Vitalik suggested paying in ETH using cryptocurrency exchange accounts as wallets, which is a standard way to do in-person payments in Latin America. Unfortunately, his first transaction did not get accepted, probably because it was under the exchange’s deposit minimum. He sent another transaction, which eventually got confirmed, but he ended up overpaying.

Vitalik also experienced transaction failures in 2022, where the first transaction failed because the default transaction from his mobile wallet sent with only 21000 gas, and the receiving account was a contract that required extra gas to process the transfer. Attempts to send a second transaction failed because a UI glitch in his phone wallet made it not possible to scroll down and edit the field that contained the gas limit. These experiences highlight the need for simple-and-robust UIs and better defaults.

Vitalik has also faced long and unpredictable time delays between sending a transaction and that transaction getting accepted in a block. Sometimes, a transaction would get accepted in a few seconds, but other times, it would take minutes or even hours. Recently, EIP-1559 significantly improved this, ensuring that most transactions get accepted into the next block, and even more recently, the Merge improved things further by stabilizing block times. However, outliers still remain, and there is a need for UX improvements around transaction inclusion.

Diagram from Yinhong (William) Zhao and Kartik Nayak.

In 2019, Vitalik was testing out one of the earliest wallets that was attempting to provide social recovery. Unlike his preferred approach, which is smart-contract-based, their approach was to use Shamir’s secret sharing to split up the private key to the account into five pieces, in such a way that any three of those pieces could be used to recover the private key. Users were expected to choose five friends (“guardians” in modern lingo), convince them to download a separate mobile application, and provide a confirmation code that would be used to create an encrypted connection from the user’s wallet to the friend’s application through Firebase and send them their share of the key.

This approach quickly ran into problems for Vitalik. A few months later, something happened to his wallet, and he needed to use the recovery procedure to recover it. He asked his friends to perform the recovery procedure with him through their apps, but it did not go as planned. Two of them lost their key shards because they switched phones and forgot to move the recovery application over. For a third, the Firebase connection mechanism did not work for a long time. Eventually, they figured out how to fix the issue and recover the key. A few months after that, however, the wallet broke again.

In conclusion, Vitalik Buterin’s article on his experiences with cryptocurrency payments highlights some of the challenges that still exist in the adoption and use of cryptocurrency as a payment method. The article emphasizes the importance of having a reliable and user-friendly interface for making transactions, as well as the need for better account abstraction to remove the need for centralized or federated relays. Additionally, the article highlights the importance of designing robust and secure recovery procedures for cryptocurrency wallets.

While there have been significant improvements in the technology behind cryptocurrency transactions, such as the recent EIP-1559 and the Merge, there are still issues with the user experience and the reliability of internet connections that need to be addressed. However, with continued efforts to improve the technology and user experience, cryptocurrency has the potential to become a widely accepted and convenient payment method.

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