Recently, Changpeng Zhao, the CEO of Binance and commonly known throughout the industry as CZ, appeared on a popular YouTube channel, Crypto Banter, dedicated to covering all things related to the digital asset world. Because of CZ’s reputation for not giving many interviews and for being more measured with his words than most, the discussion deserves our attention.
Many people regard CZ as one of the most important voices in the cryptographic blockchain space. Almost by default, he has become one of the de facto spokespeople of our rapidly growing financial sector. People tend to listen when he speaks on par with other notable people like Charles Hoskinson or Michael Saylor.
CZ recently sat down with Ran Neuner at the Binance Blockchain Week conference in Paris. For those unfamiliar, Crypto Banter covers the space almost daily. As one of the more popular YouTube channels covering the topic, they tend to be a major outlet for providing useful information to cryptocurrency advocates and fans alike. Early in the interview, which lasted just over twenty minutes, Ran asked CZ a pretty open-ended question about his view of the space right now. The exchange bears quoting at length. If you would like to hear the man himself, take a look here. For the full interview, go here.
“Ran: I’m trying to get a feel for what narratives are the most promising right now in crypto?
CZ: I wouldn’t go for the most promising. I would go chase the hardest problem, which today I think is the wallet. I think that is the main blocker for mass adoption and for DeFi adoption…
Today most people cannot store their private keys securely. The wallets require them to be technical… If your computer gets a virus, there are all kinds of problems that will happen. You will lose your money!
If you lose your computer, you have to have a backup, and now that backup needs to be encrypted. Most people don’t know how to do that properly. An encrypted backup is ok if you lose your computer, but what if eventually we die? What if you are not around? How do you give that to your kids? How do you make sure that your kids don’t get that before you die? That problem is not solved…
If I had no financial pressure, I would want to solve the most difficult problem that is blocking adoption. That would be the problem that I would try to solve.”
For those following our project for a while now, you probably already know where we are aiming to be. For those of you who have managed to stumble upon us, welcome. Allow me humbly to explain.
The Elephant in the Room
CZ laid out several very important issues facing more mainstream blockchain adoption. The most essential points boil down to something fundamental. Digital assets have not achieved a level of user-friendliness that sufficiently provokes mass adoption. That may sound simple, but it is not meant to be. The problem is multifaceted and has vexed the brightest minds in the space for years. Let us take a more detailed look.
Digital asset wallets have been available for going on a decade now. Unfortunately, what we have seen so far has failed to encourage the rush of interest and utilization we might hope and expect. Even in a place like El Salvador, which made Bitcoin legal tender last year and essentially gave free Bitcoin to its entire population, one of the major sticking points has remained the wallet they employ. But we should not be too hard on El Salvador or President Bukele. The problems of the Chivo wallet are endemic to all digital asset wallets, to greater or lesser degrees.
Out of Reach, Out of Mind
The very concept of digital assets remains slightly out of reach for many precisely because the learning curve has remained steep. The on-ramping and basic usage could be described as many things. Convenience and intuitiveness do not make that list. As things stand currently, wallet users must already be comfortable with web-based technology and be well-versed in using computers.
Even for these more tech-savvy people, wallets’ security features tend to feel too impractical and burdensome for everyday use. To be a solution for which people will opt – especially for small transactions – it has to be easy, intuitive, robustly safe and secure. Sadly, virtually all current wallets fail on all accounts. As a result, digital assets prove to be too much trouble for many people.
Security, Kind Of
Although digital wallet developers tend to design their wallets to be secure, the effectiveness of that security varies greatly across wallets and chains alike. Some wallets have two-factor authentication, and some do not. Some incorporate password protection or even rudimentary biometric security; others do not. But even with these options, the various approaches leave security gaps and vulnerabilities that previously had no easy solutions.
Most people do not quite grasp that the lack of security used in Web2.0 applications can often directly jeopardize all of one’s private information. Believe it or not, this vulnerability is a feature rather than a bug. Our data has become commodified, and with it, ourselves. The transition from Web2.0 to Web3.0 grapples with precisely this problem. For a more in-depth discussion of the differences between Web2.0 and Web3.0, please check out the article posted here.
As previously discussed, digital wallets can still be the target of scams, hacks, and general malicious shenanigans. The cumbersome design and functionality these wallets bring to the market magnify this weakness, to our detriment. To put it in more visceral terms, it does not matter if you have the greatest security in the world. The wallet is useless if hackers and scammers can access your wallet by using information they swiped from you using applications that invite security threats. Worse, such a scenario gives the wallet owner a false sense of security, the last thing anyone wants or needs.
No Safety In Numbers
The problems significantly increase when we focus on centralized exchanges – Binance, for example. As the old adage goes, “Not your keys, not your crypto.” Numerous hacks have cost digital asset enthusiasts literally billions upon billions of dollars, starting with the MT.GOX debacle of 2014. With centralized exchanges (CEX), hacking the platform is the tough, but not impossible, part. Once in, malicious actors can have their way with things, accessing practically anyone’s on-platform wallets.
These more mainstream platforms have managed to facilitate the onboarding of many people into the space, thanks to considerably more attractive and user-friendly interfaces. They have helped to expand adoption significantly, which is great. But the irony cannot be missed.
People utilize digital assets to protect their privacy and digital rights. Centralization tends to compromise precisely these things. Without a workable, easy, powerful solution, these facts stand in direct contradiction to one another. They will remain a major impediment to the sort of widespread utilization we all hope to see soon.
Last but certainly not least, CZ made a point of addressing digital succession. We will not belabor the point beyond echoing our wholehearted agreement with him. For a much more complete discussion of the problem, please see our articles posted here, here, and here.
Ahead of the Curve
Digital asset wallets have the potential to replace the current retail banking system and more. The utility, the cost savings, and the potential for markedly better security all promise a safer future for us all. Nevertheless, the transition will prove more complex than most people have anticipated. Wallets must engender a certain level of confidence amongst users. To achieve this, wallet developers need to take seriously the multitude of complications that CZ outlined and many more to boot. Only when security and ease of use have been established and proven will the rest of the retail market choose to take the plunge.
The team here at Serenity Shield decided to build a solution for precisely these reasons. Every single member of the Serenity Shield team is a veteran in the sector in our own rights. We recognize – just as CZ has – that we still have much more to do to lay the groundwork for a more secure technological and financial future. Serenity Shield prides itself on tackling some of the great fundamental problems that have arisen with the advent of blockchain technology. We are happy to say that our project is well on its way to delivering a comprehensive solution to these problems.
As one might expect, it has been incredibly validating to hear one of the actual luminaries in the space addressing such a complex but important tangle of related issues. These problems are precisely the ones our team seeks to remediate. Since our inception, the team has been beating the proverbial drum in support of privacy, security, and digital rights, while simultaneously developing a solution that addresses all of these issues.
While the team just recently successfully took our decentralized application (DApp) live, we already have our eyes on remedying wallet security for all applications. Our StrongBox solution has already proven to work as designed. As we more fully develop our solution, the team will add a whole bevy of more specific use cases. One of these use cases will be our very own Serenity Wallet. Our wallet will incorporate privacy and security by design rather than as an afterthought. That way, you can enjoy the serenity of being in the best hands possible – your own.
Please join us on our Telegram channel. You will be the first to know about official project announcements and developments there. Additionally, you can also find us on Twitter, Discord, and our website. Please visit our whitepaper and previous articles here for a more in-depth discussion of our project. We are always available on our platforms to assist with your questions.