Bitcoin’s last security challenge: Simplicity

It has been 13 years since Bitcoin’s Mayflower moment (BTC), when a few intrepid travelers decided to abandon the Fiat Empire in favor of financial independence. It took the American colonists 150 years to become enough to free themselves from the unrepresentative government. But the Republic of Bitcoin is now a Revolutionary Army and Pilgrims in a little more than ten years.

These are the kind of people who will be using Bitcoin. What are their characteristics, demographics, and technical knowledge? How does this differ from previous adopters? Are they adequately prepared to protect their investments against future and current security threats? What are the most pressing challenges facing the rapidly expanding community to ensure the success of this revolution?

Diversifying demographics

Who are today’s Bitcoiners and what do they look like? Although we don’t have all the answers, we can observe some high-level trends.

There are many ways to chart these changes. There is some unproven but valuable anecdotal evidence, such as increased diversity at industry events and the presence of more women in senior positions within the industry.

Related: 10 women who used cryptocurrency to make a difference for 2021

There is also publicly available data such as the number corporations that have Bitcoin in their balance sheets. MicroStrategy pioneers would have been ridiculed years ago. A growing number of private and public businesses, as well as countries, hold Bitcoin a part of their treasuries, and a wave miners has gone public.

Moreover, data available on private individuals indicates that old stereotypes are changing quickly. For example, in the United Kingdom, crypto-holding investors over 55 grew from 7 percent to 22 percent between 2019 & 2020. Gemini’s recent consumer research also found that more than half of crypto-curious consumers are women, and 25% are over 55.

Although Bitcoin adoption is still growing, it doesn’t have the same demographic diversity as the wider population. However, it’s evident that today’s investors are very different from Bitcoin’s Mayflower Generation. This means that they have a greater technical sophistication, including security awareness, than the Mayflower Generation. The real question is, are they ready for the risks they face?

Are there new threats?

The colonial rebels had a lucky choice of enemy: A divided government led by a king located 3,000 miles away across the ocean. We are more used to digital threats today than our national parliaments. However, government seizure was the second-most-cited threat in my latest poll of 1,600 bitcoiners.

It is easy to see why this was believed by more than 25% of respondents. One thing is the well-publicized crackdowns on crypto in China. During the Great Depression, the United States also took citizens’ assets like gold. The threat of government seizing assets is not just theoretical.

However, accidental loss is the greatest threat to Bitcoin users, as I frequently remind them and as many respondents agreed. Despite this complexity, Bitcoiners have to deal with governments and their own forgetfulness.

Related: Lost Bitcoin could be considered a “donation”, but does it hamper adoption?

Although the security landscape may be complex, the real threat (and solution) to coins of users is quite simple. It can be summarized in one word: usability.

Security made easy

Reddit’s recent post encapsulated this security problem-solution perfectly:

“Internet users aren’t ‘internet geeks’. They don’t care about tech knowledge, but they want to be able to use the internet seamlessly and easily. It will be the same for 99.9% of crypto users when it becomes mainstream.

Simple was not an issue for Bitcoin’s early pilgrims. They adopted digital asset security best practices such as self-custody, multisignature security and multisignature security right from the beginning. We now have a much wider range of Bitcoiners. A smaller percentage of them know how to keep their coins safe despite knowing the risks they face.

Similar: How to discourage adoption? Balance security and innovation in crypto

This is what I’m going to say. More people will be putting their money at risk by not exchanging their coins or using relaxed security measures such as online seed phrases and password storage. These are all risks to individuals’ investments, but more concerning is the impact large-scale losses, whether by theft, confiscation, or accident, would have on confidence and participation in this revolution.

This is despite the fact that multisig combined with self-custody is the best way to protect against any conceivable threat from malignancy or absentmindedness. It is well-proven technology. It is difficult to make it intuitive and easy for everyone to use Bitcoin.

There is a disconnect between Bitcoin’s core tenets, which are decentralization and self-sovereignty, and how our industry is helping people to achieve them. Bitcoin keys are not owned by users who don’t have them. However, users are encouraged to give up control of their Bitcoin. This results in the coins being concentrated on a handful of exchanges, making them vulnerable to attacks.

It is clear that the industry should invest more time in user education. Yes and no. There are many more things to do.

Related: Education is key to mass adoption of blockchain technology

However, you don’t need to know all the details of how to protect your Bitcoin. As every digital security expert knows, humans are the weakest link in any chain. The more complicated security systems are, they are often ignored.

The real question isn’t whether Bitcoin’s new users are skilled enough to defend themselves against the risks they face. Instead, we need to ask ourselves when the industry will make multisig self-custody so easy, frictionless, and intuitive that there is no learning curve. If we can answer this question, then we will have preserved the revolution for all generations to come.

This article is not intended to provide investment advice. Every trade and investment involves risk. Readers should do their research before making any decision.
These views, thoughts, and opinions are solely the author’s and do not necessarily reflect the views or opinions of Cointelegraph.
Jameson Lopp is a Bitcoin developer who has been active in the space since 2015. He has quickly become a respected voice in the Bitcoin community. Before joining Casa, Casa was an engineer at BitGo. He developed BitGo’s high-quality, multisig custody system before joining Casa. Casa provides secure wallets and plug in-play infrastructure solutions.