Bitcoin’s ultimate security challenge: simplicity

In the late 1620s, a group of intrepid people decided to abandon the fiat empire in England and board the sailing ship Mayflower for America—a new, financially sovereign territory. However, while it took them 150 years to grow enough to break free from government tyranny, Bitcoin has transformed from a “pilgrim in search of the promised land” to a revolutionary army in a short span of time – just 13 years.

Who are the new Bitcoiners like? How are their personalities, demographics, and technical knowledge different from previous users? Are the “Bitcoin generations” adequately prepared to protect their investments from current and future security threats? And most importantly, what challenges does the fast-growing community urgently need to face to ensure the success of this revolution?

Demographic Diversification

Who Are Today’s Bitcoiners? Although the exact values ​​are not known, some key trends can be identified.

Crypto Demographics in the United States | Source: Pew Research Center

These changes can be represented graphically in a number of ways. First, attendees at industry events are more diverse and more women are in leadership positions.

Next, several publicly available data sources show that many companies hold Bitcoin on their balance sheets. Years ago, pioneers like MicroStrategy were laughed at. Today, more and more public and private companies (as well as countries) are holding bitcoin in their coffers, and a wave of miners are beginning to list it publicly as well.

Most importantly, Data Existing records of people show that even old clichés are changing quickly. In the UK, for example, the proportion of investors over 55 with crypto holdings increased from 7% to 22% between 2019 and 2020. The latest user research by Gemini shows something similar shows more than half of “crypto-curious” customers are women, with 25% being over 55 years old.

Existing Investors vs. Crypto Curiosity | Source: Gemini

Certainly, Bitcoin adoption still has some room to grow before fully matching the demographic diversity of the general population, but it’s clear that investors today are very different than they were a generation ago. While that’s welcome, it also means their technical sophistication – including their sense of security and capabilities – is more complex. The key question now is: are they prepared for the threats they face?

Ever-evolving threats?

In today’s digital world, we are used to a multitude of threats that are diverse, insidious and proliferate much faster than simply stagnant national governments. However, in the most recent survey of 1,600 Bitcoiners, the second most frequently cited threat was government asset confiscation.

It’s easy to see why more than 25% of participants agreed. First, there are widespread crackdowns on cryptocurrencies in jurisdictions like China. The United States also confiscated assets from its citizens, such as gold, during the Great Depression. So the risk of government seizure is not just theoretical.

However, the most significant threat to users is accidental damage. Despite this, the risk landscape for Bitcoin is significantly more complex than for other forms of digital security. Bitcoiners must confront both governments and their own forgetfulness.

While it’s true that the security landscape is complex, the actual threat (and solution) is fairly simple and can be summed up in a single phrase: ease of use.

Simplify security

This solution to the security challenge has been succinctly summed up in one post recently on Reddit:

“Internet users are not ‘Internet enthusiasts’, they are not interested in learning about technology, they just want to use the Internet seamlessly and easily. When crypto becomes ubiquitous, it will be exactly the same for 99.9% of all users.”

Simplicity was never an issue for the early Bitcoin proponents, as they embraced digital asset security best practices such as self-custody and multi-signature security from the start. We now have a much wider range of bitcoiners, but only a small percentage of them know how to keep their coins safe, even if they understand the threats they face.

Obviously, many would jeopardize their investment by holding coins on exchanges or using permissive security methods like storing passwords and seed phrases online. These, of course, threaten the investment of individuals, but more worryingly, large losses – whether from theft, decay or accident – lead to a loss of confidence and prevent others from taking part in the revolution.

Still, self-storage combined with multi-signatures is the most effective way to protect against potential risks that can arise from malicious attacks or carelessness. The technology already works and has proven itself. The only problem is that it is easy and intuitive to use for every bitcoiner.

The current landscape demonstrates a lack of coherent alignment between Bitcoin’s core tenets of decentralization, autonomy, and user governance, to a degree sufficient for the industry to support their implementation. It is clear that users who do not hold keys do not own bitcoins, but they are encouraged to relinquish control of their bitcoins, resulting in the coins being centralized and vulnerable to attack in a few exchanges.

The obvious answer is that the industry needs to put more effort into educating users? Well, maybe yes or no. Given the general principle of the importance of self-custody and why you should secure your bitcoin as if it were something more important than the current market valuation, there is certainly more work to be done.

However, why should you concern yourself with the ins and outs of protecting your bitcoins? Any digital security expert knows that people are the weakest link in any chain, and the more complex security systems are, the more overlooked they are.

So the real question isn’t whether new Bitcoin users are able to protect themselves from the threats they face. Instead, we should be asking ourselves when the industry will do what it should have done in its early days and make multi-signature self-signing so easy, straightforward, and intuitive that it doesn’t have to be at all. To answer that question, we will take action to protect the revolution for all future generations.

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