The developers at Ethereum are working hard to increase the ease of use of its blockchain. In fact, the cost implications of basic screw-ups are a significant deterrent to mainstream crypto adoption. For example, once a user misplaces their crypto account keys, they will likely be unable to retrieve their crypto assets forever. In comparison will all other factors, it is much more likely that a person would lose their wealth in digital assets than in conventional banking systems.
The Inevitability of Human Error
It is prevalent among blockchain developers that the possibility of human error is almost a certainty. This means that it is hard for crypto to gain mainstream acceptance without assurance of fail-safe mechanisms with enhanced ease of use. This need gave birth to the “Account Abstraction” concept.
Also Read: A Raising Alarm Against ‘Godfather’ a New Malware Targeting Banking and Crypto Applications
What is Account Abstraction?
Account Abstraction(AA), in its conceptual stage, utilizes smart contracts for the execution of digital asset transactions through the creation of specific validation rules. Crypto users would no longer be required to confirm transactions with their private keys if the concept is successfully implemented.
Kristof Gazso, the co-author on AA at EIP(Ethereum Improvement Proposal), stated the following:
“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 AA will enable developers to modify Ethereum and make it function as a conventional bank account dealing with cryptocurrencies. This will facilitate easier transactions, automated bill payments, and more. It is necessary to understand Ethereum’s existing transaction mechanism to truly comprehend AA’s potential in transforming the current usage of cryptocurrencies altogether.
Also Read: What is a Crypto Broker White Label Platform? How Does It Work?
Ethereum Accounts: Contract Accounts(CA) and External Owned Accounts(EOA)
Ethereum enables users to choose and create between CAs and EOAs. These account types are separate from each other in terms of Ethereum’s network transactions.
EOA is the generic Ethereum account type for users. It is generally the one provided by wallet service providers. Users are providers with 2 keys: a public one and a private one. The public key can be used to deliver funds to the EOA. However, only the account’s true owner has access to the private key. It is kept secret and is necessary for initiating transactions from the account.
Meanwhile, CAs, or in common terms, “smart contracts”, can be likened to miniature computer programs existing within Ethereum’s network. CA’s are controlled by pre-programmed codes and not private keys and cannot auto-execute transactions. An EOA must deliver a transaction(message or instruction) to the CA for completing transactions.
The main challenge for EOAs is human error. EIP 4337 co-author Gazso stated, “One key has complete admin control over your account. If you lose it, too bad, you’ve lost all control over your account forever.”
Losing access to an EOA’s private key means the end-all. It is not possible to get assistance- there are no “key-recovery protocols” or “password reset” options to retrieve funds kept in crypto.
“Humans are the biggest security flawed Ethereum account management,” mentioned Gaszo. Bitcoin also comprises a similar mechanism of private keys. Chainalysis reports missing keys can result in the disappearance of almost 23% of all circulating BTCs(approximately 3.79 million Bitcoins) forever.
The Mechanism of Account Abstraction
The drawbacks of EOAs are addressed by Account Abstraction through their merger with CAs. This enables users to create accounts with inbuilt safety mechanisms and other standout features for validating transactions.
In a previous blog post, Ethereum founder Vitalik Buterin stated, “instead of [smart contract code] just being used to implement the logic of applications, it would also be used to implement the verification logic (nonces, signatures…) of individual users’ wallets.”
Utilizing account abstraction, it is possible to program user accounts and incorporate social recovery systems. This will enable the possibility of account retrieval, in case the owners lose their private keys. An additional option will be the possibility of “multi-signature” wallets that require authorization from multiple users for extra security.
An account subject to AA can eliminate hard-coded EOA limitations. It can be used to define gas fee payment options. AA can allow users to opt for different crypto tokens(DOGE for example) for gas payments instead of the conventional ETH. They also allow assigning others to settle the payment for gas fees. The possibilities are endless, however, there is an element of complexity to the EOA transaction initiation requirement.
How to Full Integrate Account Abstraction?
There are several recommendations that plan to add Account Abstraction with Ethereum, with EIP-4337 being the most widely called for. “It really is the first proposal that achieves Account Abstraction without requiring a hard fork,” mentioned Gazso.
The prime benefit of EIP-4337 is that executing it will not need any additional changes to the core protocol of Ethereum. The proposition would simply add another AA layer on top of Ethereum’s core protocol – empowering wallet service providers to create accounts that are owned by users and making use of smart contracts to set the framework for starting transactions.
The true reason behind the limitation of widespread AA adoption is momentum. It is hard to create a wallet, make an official launch and then ship it across locations all over the world. “Convincing people to try out new technology, new wallets, is a very difficult task,” Gazso added. This is one of the main reasons why crypto beginners tend to opt for options that have been existing for a longer time period and is battle-tested, such as a MetaMask wallet.
Tracking down individuals to carry out these new advances is by all accounts the greatest bottleneck for AA. In any case, the tide for that is by all means evolving.
Certain Layer-2 Ethereum mechanisms are redefining the native integration of AA into AA. It is being increasingly considered for automatic payment deployments by linking bank accounts for bill payments, powered by blockchain technology. Account abstraction is currently one of the hottest topics in contention across the blockchain ecosystem, with several experts suggesting that the present year may be when it finally sees a widespread increase in usage.