Bitcoin Forum

What do you see as the major flaws of the Bitcoin ecosystem right now?

Now I'm not talking about what updates or hard forks you want to see for Bitcoin to improve scalability or add in private transactions or whatever. I'm talking about what do you see as the major flaws in the Bitcoin ecosystem that could be fixed without changing the bitcoin code.

What things like security, user experience, etc do you think could be worked on to make it easier for people to use Bitcoin?

The main one I think about is custody - generating and securely and conveniently storing key/address pairs - could be improved for the average person. As in it shouldn't require someone significant research to figure out how to make a key/address pair and not lose it while keeping it secure.

What do you guys view as the main solvable shortcomings of the Bitcoin ecosystem, that is just waiting for some developers to come along as give us a better solution?

This is not a flaw, definitely not a flaw in bitcoin. If anything it is a flaw in people.
All the tools are already available, the encryption techniques, the walk-throughs on how to create a cold storage securely, BIP38 encryption of private keys, pen and paper is found in every home too, hardware wallets can be bought easily,... We can't force people to spend time reading the information that is already available they have to spend time googling.

I do not know if this is also a problem and hopefully you respond. I think that instructions should be fool proof as much as possible, the reason that some do not read this instructions is because some of them find the instructions pretty technical which could discourage non-technical people that want to join the party, there must be a way to simplify these instructions almost to the point that a 7th grader can do what the instructions by themselves.

Well there is no way around most of them. You see, reaching security is not an easy task, it takes a lot of effort and self education. For example verifying signature of a wallet file you download to install is "technical" and hard at first but there is no way around that. It can't be simplified any more than it currently is. Although I agree that there is always room for improvement.

Yeah exactly. To say Bitcoin being hard to use and requiring a lot of research is not a flaw but a human flaw makes no sense. Things take off when they are EASY to use. Crypto being confusing and requiring significant research to make sure you are doing things right and safely is absolutely a flaw in the ecosystem.

Tell someone they have to buy a hardware wallet and they'll be like what they heck is that, why do I need to buy something to own bitcoin, how do I use it, etc. Mention BIP38 encryption of private keys to someone and you're gonna get a blank stare. Saying you just need pen and paper doesn't tell anyone anything about bitcoin and of course doesn't magically generate keys with pen and paper. A lot of user experience needs to be simplified in this regard. You have to know technical details about Bitcoin, where to download some safe key/pair generator from that won't be some malicious attempt to steal their bitcoin, the average user shouldn't need to know anything about encryption techniques, etc.

I'm talking about simplifying the situation so anyone can custody bitcoin, like you download an app, and it has clear unmistakable instructions for a few easy steps that provides a key/address pair. Something like that. Where no technicals need to be known, just download a well known app, follow the instructions and click a few buttons. And they get their key/address pair in a foolproof and secure manner that they can store offline.

Anyway, what other areas could use vast improvement to usability?

Who are you expecting to bring these changes? Bitcoin is a decentralized network. It's up to people like you and me to make applications on this network to make it more accessible to the general people. And it isn't like that people aren't working on it. There are already very handy mobile applications and web-wallets which come with self-custody. One such which I noticed recently on forum is Bitamp - a client-side, open-source application (not endorsing).

These wallets have clear-cut instructions like you said. But we have to realize, convenience comes with cost. We can't expect same level of security and privacy by using these applications. There is no shortcut to security. If you are using hot wallet on mobile or inputting seed phrase in your browser, you are exposed to 'n' numbers of vulnerability.

So, if user wants to hold big amount of bitcoins, he has to do all right steps. Buy hardware wallet, sign transactions offline, verify source code, verify signatures of the application and use 'accessible self-custody wallets' only for small amounts and regular use.

The difficulties in buying Bitcoin. There is an enormous amount of fraud surrounding the purchase of Bitcoin, and this puts off a lot of people. Another problem for new users is the risk of sending money to the wrong address. I've suggested sending a small amount first before paying in full for an asset.

I've also hit a problem with my recent domain name listings as a result of the recent price rise. I'm now going to have to change my prices from BIN to guideline prices.

It feels like wallets still assume that their users are some sort of power users/tech geeks/programmers who are familiar with at least basics of cryptography. For example, when you make a new Electrum wallet, it just says "this 12 words can be used to recover your wallet, don't disclose them to anyone". What should have been done instead is a warning IN BIG RED LETTERS that your coins will be lost forever if you lose this phrase on accident or if it gets stolen. This warning should be supplemented with links to good educational resources about crypto security. Electrum asks to retype the seed, but it's not enough - there should be also a checkbox, again with big letters for acknowledging that the user understands their responsibility. Would it be annoying? Yes, but it's worth it if it will prevent some people from being careless.

Bitcoin is currently ideal for large transfers, but completely unsuitable for microtransactions. This is a rather significant problem and often leaves much to be desired, but fortunately, it is nevertheless in the process of being solved.

Security, of course, is, in principle, the cornerstone of any type of money, any financial asset. Many are ready to often lose on the course but are not ready to lose from the fact that the asset is unsafe. In this case, in addition to the technical implementation that is inspiring, Bitcoin allows you to be your own bank. You can, or rather you must keep your funds in wallets, and thus, subject to the rules of the minimum requirement, your funds will be under your control. And you can be responsible for the safety of your funds yourself. This is the most basic tenet of bitcoin culture, "not your keys, not your bitcoins."

There is a perception in certain situations that usually when we assume it from our environment and perspective we believe that it is the same as the average or the vast majority.

With bitcoin it happens that generally as in your assessment (OP) "we believe" that it should be improved (scalability) but that does not mean that it has "defects" and perhaps it is the wrong word to indicate adaptation (scalability) with a certain group of users and established systems , which as a counterpoint these economic systems have many defects that tend to harm users.

Bitcoin, maybe! It must have to adapt to certain socio-economic situations, but in the way it was designed it does not harm the user, as if the defective traditional Fiat system that we have does it.

Ever since cryptocurrency became an acceptable medium of digital asset exchange, the cryptocurrency market has been severely hit by rising instances of cybercrime, threatening the very legitimacy of the cryptocurrency ecosystem. The cryptocurrency market has been facing increasing incidences of fraud on legitimate transactional activities. A number of cases of money laundering through fake accounts created using stolen and forged identities; and hacking of legitimate accounts to transfer payments for fraudulent transactions have come to the fore in the cryptocurrency market. Enterprises need to harness the power of advanced cyber threat intelligence to detect dubious online behavior and prevent and mitigate cyber theft in the cryptocurrency market before it affects end users through data breach or loss of money. I came across https://www.futuremarketinsights.com/reports/cryptocurrency-market (https://www.futuremarketinsights.com/reports/cryptocurrency-market) while researching about the challenges or flaws in bitcoin ecosystem. You might find it useful. It helped me gain a lot of insights.

Its the scam still that is making people backing away from BTC. Difficult to buy and some people hard to understand bitcoin and blockchain but this can be learned over time but the scammer getting sophisticated and have already blend among us, its really not easy to make new users avoid the scams and this isn't even just for BTC but to all cryptocurrency.

I don't think that scams are the main deterrent. I'd say lack of knowledge and volatility might be. Scams are everywhere. You can get scammed on ebay, somebody can hack your social media or lock your files with ransomware. Bitcoin has nothing to do with it and it's secure by itself.

What I'd change is fees. We need lightning network to become big. We need some ways to make transactions a bit cheaper and faster. They aren't a big problem yet but if we want to move forward we'll need some solutions.

Learning a new skill regardless of how easy it may seem is always work, what happens is that the current generation has been exposed to computers to such an early age that they do not remember they had to work in order to reach their current level of competence, it is obvious that even for us it took us time and effort to master the skills to secure our coins, especially when there was less information about how to do that kind of stuff in the past, and while there is always room for improvement it is difficult to see how this can be made any easier.

It’s as good as it can get currently if we’re talking about implementations and features. Perhaps what we could do more with is the actual increase in areas to spend since that’s what we’re lacking currently. Most people in the bitcoin ecosystem are focused more on the growth of their investments while leaving the utility aspect of the coin at the low side. If we focused just a little more on payments and whatnot, see how strong bitcoin’s evosystem will be plus adoption rate, too.

Yup agreed. Lots of fraud going around, not sure how you combat that though other than just knowing the basics like just buy off reputable exchanges.

Agree on the wrong address too. Everytime I sent a transaction I always send a tiny one first just to be extra careful I typed the damn thing in correctly haha.  I mean I guess that's what QR codes are for, can't screw that up as long as you have the correct QR code.

Agree 100%. Power user is a good way to put it. You shouldn't have to be a power user. I was looking at another thread on here about the most secure way to have a cold wallet, and people are saying like "install linux, download some software, check the checksum or whatever to make sure you got the correct software, run command line commands, etc". I'm like good lord this is a major problem. You shouldn't need to be into coding and be a power user of crypto stuff just to be able to safely use it. Vast improvements are needed to help people use Bitcoin as easily as they use other financial apps.

I was thinking of making an app for bitcoin that would be much more familiar to the average person. Specifically making and not worrying about losing keys. Like have a (long) password (or maybe even two passwords for extra security) + pin number that generates a key/address pair. Your own password (or two) and PIN is going to be a lot easier to remember than a giant string of characters or twelve random words in a seed phrase. People remember their passwords because they made them and it has meaning to them, whereas a long string of characters and digits or a series of 12 words has no meaning to them. Then when you want to make a transaction you just plug in your own password and PIN number and it spits out your private key and address. And obviously as part of the process it'd give the user clear steps like turning off Wifi,etc.

So if this app is not just a key/address generator but also a wallet, then when you send a transaction, if you're not sending the entire amount in an address then it'd make you designate another password + PIN to create a new address to sweep the rest of the funds to.

If you often make transactions then using a master key seed phrase would work better than having to repeatedly come up with passwords, but for the average HODLer who makes maybe a couple addresses and just sends funds to it whenever they stack sats this system would be a lot more user friendly and totally comprehensible to the average person without needing to do any research or be a power user of anything.

This is well known. In roughly 2140, when there all 21 million Bitcoin have been mined, miners will only get transaction fees.

The same arguments could be made for literary anything else as long as the person you are telling this about is not familiar with that thing. For example if you try to introduce cars and how to drive them to someone who has never even seen a car you will get the same "blank stare" when you try describing what the 3 pedals are for. You can't say that is a flaw in cars just because it takes a lot of effort to learn how to use them.

Security is the biggest flaw of everything that has to do with online, bitcoin did what it was build for and keys safety isn't one of them,  private keys are meant to be kept in private and that's not on bitcoin but users themselves, bitcoin isn't build to keep private keys itself for one particular user only, we have to keep private keys ourselves, is this a flaw? No

I do not think that's an inconvenient compared to conventional money storage methods, because if you store your money in bank accounts its more difficult to creat an account and access your iy because of all the paper work, but with bitcoin you can do it in five minutes and you can secure your private key yourself,for me the inconvenient is the high fee because you can not make small transactions.

From what others had said above, I think there's isn't any actual renovations and implementations on the bitcoin network as it had already shown a great methods to securing funds. Its up to the people in the blockchain industry to avoid been vulnerable by constantly reading the safety procedures in keeping seed phrases and keys at safe place.
On the other hand, in some months ago, there was an introduction of the Lightening Network (LN) which was built as the Layer 2 protocol on top of Bitcoin network which actually will reduce the transaction fee and some other new features too, isn't it part of the new development in the industry?

Right now hardware wallets is the easiest solution, but they come at a price, and a lot of people would rather save $50-100 if they can not pay it. I remember there was some sort of cold wallet that came together with its OS, so you just had to put it on a USB drive and it was ready to go, but it isn't as popular as (live) Linux + Electrum. Maybe some day someone will come with a solution that would allow people to create something close to a hardware wallet with software that can be installed on a USB stick and used just like a hardware wallet - perhaps virtualization can help with that.

Not really a good analogy. Understanding how to drive a car is extremely easy: turn steering wheel to turn car, press pedal to go forward, press pedal with gear in reverse to go backward, press  the other pedal to brake. Very basic and easily learned. No in depth research is required, no technical know how of how the car operates mechanically is required. The hard part associated with driving is learning to drive safely with other people on the road, not simply using a car. Also, to state the obvious, hitting the left turn signal instead of the right turn signal in a car doesn't result in you losing all your money!

A good car-bitcoin analogy would be if you had to learn significant details of how a car operates mechanically just to drive the car. Obviously that is not the case, but to use bitcoin safely (to really use it, not just buying & selling on an exchange) you have to do some in depth research and be aware of scams and possibly even have some computer know-how in order to be really safe and not risk losing all your money.

Thank you for instead of refuting my point, giving a great example of my point!

It has so high transaction fees. This is the only reason why there are so many other coins

But notice how in the topic thread and my opening post I said I am talking about solutions not to Bitcoin itself, but to the ecosystem. You are simply agreeing with me, not disagreeing as you seem to think. Problems with key security is a flaw in the Bitcoin ecosystem that is in need of a good solution. I specifically stated this thread is talking not about changes to Bitcoin itself, but changes to the ecosystem, that blockchain/app developers (not bitcoin core developers) could provide to make bitcoin more usable for the average person.

I feel like some people are missing the point of this thread. We're talking about places in the the Bitcoin ECOSYSTEM that are ripe for solutions to problems to make Bitcoin easier to use for the masses.

We AREN'T talking about changes to the Bitcoin blockchain itself. We aren't talking about fees, scalability, etc.

What sort of problems do you see, and what solutions to those problems, do you think could be made in the Bitcoin ecosystem. Basically, what solutions could be provided by blockchain/application developers to make it easier and less dangerous for someone new to crypto to setup and use a wallet, make key/address pairs and store them securely without worrying about losing their keys, sending transactions securely, etc. Talking about user experience solutions that make Bitcoin safer and easier to use for the masses (ie people who don't want to do days of research on bitcoin technicals just to be able to set up a wallet safely and make transactions safely and not worry about hitting a wrong key and their money is gone.

A good design that is user friendly is crucial in the mobile version. We spend the most time on our SmartPhone which will allow more people to join the great bitcoin wave.
Easy to receive, send, buy and sell bitcoin. If you talk and show anyone how easy it is to handle bitcoin, you will win a new user. So I think that this is what developers are thinking about their applications now that Paypal is in the crypto space and the growing demand for new applications is coming.

I don’t really know if what you have pointed is a flaw, because that’s like a normal thing and I think anyone can do that if they just Google it and follow the process that’s involved in doing it. So, I wouldn’t say that’s a flaw, and you can make use of Trezor or Nano in storing your coins and you will be more safe than when you’re making use of some other wallets.

Maybe we should be talking about security when it comes to flaws, but I think that this is also up to us, and another thing is that we are exposed to so much scams, but it’s also up to us to be careful to avoid these scams.

This is inevitable, the space on each block is limited and when there is high interest in securing a spot on the next block like when there is a bull run then people are going to compete to get their transactions confirmed as fast as possible and this drives the price up for transactions, so for the time being your only option are to be patient as most likely the bull run that we are experimenting will not disappear any time soon and the congestion on the network will continue for a long time.

Definitely transaction fees.

For mass adoption, it is unconceivable to have transaction fees. We've shifted to a zero fee world. Even card are zero fees now...
In a user experience perspective, transaction fees belong to the past and are a real drag on the adoption.


On the other hand, how could Bitcoin survive without fees when the 21m will be reached? (from a miner perspective)

I am very curious to see how Bitcoin will behave that very day.

to me the bitcoin biggest flaws are the high transaction fees but this can be fix itself without update or fork  .

 it can be fix again or the fees will lower once the btc value decreases . scalability issues , making a transaction private and about the custodial wallet issue ,  all of those can also be fix without needing for a change of code  but the fix can be temporary and not permanent  .

the only way to make the fix permanent is i guess to update btc or change something in it .

Do you even realize that your post contradicts itself? Bitcoin Fork is the way to upgrade blockchain permanently. There are different kinds of fork(soft and hard fork) which are being used to solve the scalability issue. Updating the code is immenent to meet the increasing demand of BTC and Fork is the way to update the code to make BTC blockchain more faster since blockchain is decentralized.

What I see as a flaw is the ability of Bitcoin to be legally and generally accepted by the whole country in the world.
And for Bitcoin to be use as other currency for the buying of goods and service in the world market.

But that is not the fault of bitcoin, bitcoin was created as a response to corrupt governments stealing the wealth of their citizens through inflation and it is obvious those same governments are not going to like bitcoin at all and are going to fight it, this is why adoption is so slow, but once a major crisis comes related to their monetary policies then you can be sure people will finally understand why we need bitcoin and even if governments try to fight against bitcoin at that point people will use it regardless of the consequences.