While I'm glad there are core technical solutions being pursued to address both issues I think there is more to consider.
In a sense those approaches are focused very near the problem. They deal with them in a core technical way rather than a more practical way.
Let's say both issues are resolved as imagined. What happens then? Little Timmy says okay grandma you just download the wallet client and install it - no it's simple really - then wait for it to download the blockchain. Before you send any money to your address remember to back up your wallet, in 3 places! That's simple too, you just find the wallet.dat file on your computer... Okay, now you are ready to receive and send money. To do that give out your receive addresses; they are long strings of characters, just remember to wait for 6 confirmations for all payments!
Do you really see that working for mainstream users?
I don't. I see things happening a much different way. Most users will use eWallets for transactions which solves the scalability issue
and helps the security issue.
People can understand using online services like PayPal, logging in with their password and paying to someone's email address. They can see their balance easily and they know how to give out their email to receive payments.
Right now you're thinking, but they have to put too much trust in eWallets! No, not necessarily. The eWallets don't hold big BTC balances. They are really just transactional.
People store the majority of their coins safely offline in a hardware wallet
Yes, what we need to be working on is hardware wallets
. The Bitcoin Card
is one example of this, but I think that may end up a bit fussy, possibly pricey, and tricky to use for many users.
We need someone to manufacture hardware wallets as follows:Hardware Wallets
A hardware wallet is about the size of a DSL modem. It's composed of a very simple cpu/motherboard, small solid state hard drive, NIC, probably an LCD screen, and a few ports as I'll describe. It has a clean Linux install and a Bitcoin client. MSRP about $70.00.Little Timmy tells grandma what to do:
Okay, grandma, just go to BestBuy, or this website and buy the bitcoin solid wallet (hmm i like how that sounds!). Open the package and plug it in. Connect the cable to the Internet and press the "on" button. When the light turns green it's ready to use!
On the screen you will see it says "receive address" followed by a long string of characters. Don't worry about that right now. In the package you will see two USB sticks. Take one and plug it into the USB slot. Press the top button that says "backup wallet". When the light turns green remove the USB stick, plug in the other USB stick and press the "backup wallet" button again. Put the USB sticks in two separate safe places, like a bank safe deposit box for one, and home safe for the other.
Now you're ready to use Bitcoin!
Go to WalletBit.com and sign up with an email and password. You will also have to go to Mt.Gox and sign up to buy some bitcoins, but for now I'll just send you some to get started and you can pay me later. In fact, I've already sent coins to your WalletBit account because I know your email address!
Log in to WalletBit and you'll see them there! You can pay anybody just by using their email address.
What's the SolidWallet for? Oh that's when you're ready to really
get into Bitcoin and you will hold lots of them. Remember your "receive address" it showed? Well, when you do buy lots of bitcoins, like on Mt.Gox, you will send them to that address. It's easy. Then when you want to fill up your balance at WalletBit just log in there and click "Deposit Bitcoins". Unplug your computer keyboard and plug it into the back of the SolidWallet and press the "Send" button on top. Type the long address shown by WalletBit, just do it carefully and double check it. Press the "BTC amount" button on top and type the number of bitcoins you want to deposit. Press the "Send" button again. That's it! Your SolidWallet screen will show your new balance.
If you notice, this solves (or helps significantly) three problems: security, bitcoin scalabilty (most transactions happen on eWallet databases), and usability