For most of cryptocurrency’s journey, owning digital assets required a cold wallet, accompanied by a 12 or 24-word seed phrase that users needed to carefully write down, store securely, and keep from being lost. While this method provides a high level of security, it has often deterred less tech-savvy individuals from participating in the crypto space. To facilitate mass adoption, industry leaders agree that eliminating the seed phrase requirement for entry is essential.
Ana Jacobson, the brand campaigns lead at Tangem, recently discussed how innovations in wallet technology are refining user experiences to broaden adoption. She emphasized the drawbacks of seed phrases, noting that they were initially designed to enhance security but have instead created significant accessibility barriers. Jacobson pointed out, “It was too hard for people to get into crypto. They had 12 or 24 words. Let’s narrow it down to just three units, and they still can’t do it.” This complexity has frustrated many potential users, including one anecdotal case of an Uber driver who refrained from purchasing Bitcoin due to fear of misplacing his seed phrase.
Tangem has sought to simplify this process through a unique 3-card backup system. While the company has not entirely eradicated seed phrases, it has transformed their nature. The seed phrase is now generated and securely stored on chips within physical cards, making it invisible even to Tangem. Each user can back up their cryptocurrency on three separate cards, which hold the private key, decentralizing and safeguarding access.
Jacobson clarified that the goal isn’t necessarily to remove seed phrases entirely but to empower users with more choices. “In the spirit of self custody and self sovereignty, it’s important for people to have the option to choose for themselves,” she explained. The redundancy model of the cards is straightforward: lose one card, and users can rely on the backup; lose two, and it’s time to reconsider storage methods; lose all three, and the responsibility for recovery falls entirely on the user, highlighting the true nature of self-custody without third-party assistance.
In addition to the card system, Tangem is exploring innovative options like wearable wallets, including rings, which also incorporate backup cards to store private keys securely. While seed phrases have been a cornerstone of crypto wallets for nearly two decades, Jacobson advocates that they should not remain the primary means of self-custody if the industry aims to attract newcomers.
The evolution of wallet technology reflects a shift towards making cryptocurrency more accessible, particularly for individuals who may feel overwhelmed by the traditional complexities associated with digital assets.
