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Ethereum Upgrade Could Make It Harder to Lose All Your Crypto
Account abstraction – a concept recently embraced by Visa – could make Ethereum wallets significantly more user friendly.
Ethereum developers are hard at work trying to make its blockchain more user-friendly.
One of the downfalls of crypto is the costliness of simple screw-ups. For instance, if a user loses the keys to their crypto account, they could lose access to their crypto holdings forever. In the face of this and other potential pitfalls, it’s vastly easier to lose your money in crypto than in traditional banking.
Blockchain developers increasingly recognize that human error is an inevitability, meaning it will be difficult to push crypto into the mainstream without fail-safes and better ease of use. One of those innovations is a concept called “Account Abstraction.”
Account Abstraction (AA) aims to use smart contracts to execute crypto transactions, by creating certain validity rules. With AA, users won’t need to sign off on every transaction with one’s private keys.
“We're going to be at a point in the future where using an Ethereum account, it's going to be just as simple as using a bank,” said Kristof Gazso, a co-author for an Ethereum Improvement Proposal (EIP) on AA. “People won't have to make that trade off of like, ‘Hey, you know, I like decentralization, but also, it's a pain in the ass to use Ethereum.’”
Ultimately, through AA, developers want to make Ethereum as usable as a traditional fiat bank account, so users can make transactions more easily, program automatic bill payments and more.
Account Abstraction addresses the shortcomings of EOAs by merging them with CAs – allowing people to create user accounts with built-in fail-safe mechanisms and other special features for verifying transactions.
As Ethereum co-founder Vitalik Buterin described in a 2021 blog post, “instead of [smart contract code] just being used to implement the logic of applications, it would also be used to implement the verification logic (nonces, signatures…) of individual users’ wallets”
Under account abstraction, user accounts could be programmed to include social recovery systems where several people – each with a key of their own – have the ability to return an account to its owner should the owner lose access to the private key.
One could also create “multisig wallets” that hand account ownership over to a group – requiring multiple different parties to sign off on transactions as a sort of extra layer of security.
Accounts under AA could also avoid some of the other hard-coded limitations of EOAs. They could, for instance, define how users pay gas fees. Currently, under EOAs on Ethereum, users have to pay gas in ether (ETH). But with AA one can choose to use a different cryptocurrency to pay gas with (like DOGE), or you can assign someone else (like a parent or friend) to pay gas fees.
All of these systems are possible to implement today using CAs, but with a significant degree of complexity and overhead (i.e., gas costs) due to the requirement that all transactions are initiated by an EOA.
There are a bunch of proposals that aim to add AA to Ethereum, with the most prominent being EIP-4337. “It really is the first proposal which achieves Account Abstraction without requiring a hard fork,” Gazso said.
The key advantage of EIP-4337 is that implementing it won’t require any changes to Ethereum’s core protocol. The proposal would just add a new account abstraction layer atop Ethereum’s core protocol – enabling wallet providers to create user-owned accounts that use smart contracts to set the rules for initiating transactions.
So if all these tools are currently available, why isn’t account abstraction more widespread?
The answer to that is momentum. It’s obviously not easy to build a new wallet, launch it and ship it to people. “Convincing people to try out new technology, new wallets, is a very difficult task,” Gazso added. That is why people who do initially start their crypto journey turn to something that has been around longer or that has been battle-tested, like a MetaMask wallet.