Account Abstraction will make Ethereum as easy to use as a traditional bank account.
The Challenge of Human Error in Crypto
Ethereum developers are working to make the Ethereum blockchain more user-friendly. One of the main challenges of crypto is the potential to lose access to one’s crypto holdings due to a simple mistake such as losing access to one’s private key.
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 are increasingly recognizing 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.
An article published today on CoinDesk breaks down the concept of Account Abstraction (AA). This concept 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.
The goal is to make Ethereum as easy to use as a traditional bank account, so that users can make transactions more easily, program automatic bill payments and more.
Understanding Ethereum Transactions: EOAs and CAs
To understand how AA would change the nature of how one may use crypto, it’s important to understand how Ethereum transactions operate today. On Ethereum, users have the ability to create two types of accounts: External Owned Accounts (EOA) and Contract Accounts (CA). The two account types differ in terms of how they initiate transactions over Ethereum’s network. EOAs are the typical account-type for Ethereum users and are the type of account one would use if they have used a wallet provider such as MetaMask and Coinbase Wallet.
The Problem with External Owned Accounts
With an EOA, users are given a pair of keys: a public and a private key. Anyone can send funds to an EOA using its public key. But only the account’s owner – whoever has access to the account’s private key, which should be kept secret – can actually initiate transactions from the account.
The problem with EOAs is that if a user loses their private key, there is no way to regain access to their funds. And even if a user doesn’t lose their key, if someone gets their hands on a person’s private key, they gain complete control over that person’s funds.
CA, also known as “smart contracts,” are like mini computer programs that live on the Ethereum network. These accounts are controlled by code, but they cannot initiate transactions themselves. An EOA needs to send a transaction to a CA in order for it to make transactions of its own.
How Account Abstraction Addresses Shortcomings in Ethereum
Account Abstraction addresses the shortcomings of EOAs by merging them with CAs. It allows people to create user accounts with built-in fail-safe mechanisms and other special features for verifying transactions. This move is seen as necessary to push crypto into mainstream use.
A Step Towards Mainstream Adoption of Crypto
As Kristof Gazso, a co-author for an Ethereum Improvement Proposal (EIP) on AA says “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.” The goal is to make Ethereum more user-friendly and secure, preventing costly mistakes and increasing the chances of crypto being adopted by mainstream users.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.