Ethereum (ETH) developers are working hard to make the blockchain more user friendly.
One of the biggest problems in the cryptocurrency market is the cost of simple mistakes. For example, if a user loses their account keys, they may lose access to their cryptocurrencies forever. Given this and other potential pitfalls, it is much easier to lose your money via cryptocurrency than it is to traditional banks.
Blockchain developers are increasingly realizing that human error is inevitable, which means it will be difficult to get mainstream into the crypto sector without safer technologies. One of the innovations that developers are betting on is the so-called “Account Abstraction” (AA, or Account Abstraction, in free translation).
Account abstraction aims to use smart contracts to carry out cryptocurrency transactions by creating certain validity rules. With AA, users will not need to sign each transaction with their private keys.
“We will be at a point in the future where using an Ethereum account will be as simple as using a bank,” said Christophe Gazso, co-author of the Ethereum Improvement Proposal (EIP) at AA.
Ultimately, with AA, developers want to make Ethereum usable like a traditional bank account, allowing users to easily transact, schedule automatic bill payments, and more.
But before understanding how AA can change the nature of how crypto is used, it is important to understand how Ethereum transactions work today.
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Ethereum Accounts: EOAs and CAs
On Ethereum, users can create two types of accounts: “Externally Owned Accounts” (EOA) and “Contract Accounts” (CA). The two account types differ in how transactions are initiated on the network.
EOAs are the typical accounts for Ethereum users. It’s the type of account you’ll use if you use a crypto wallet like MetaMask or Coinbase Wallet.
With EOA, users are given a pair of keys: one public and one private. Anyone can send money to an EOA account using your public key. But only the owner of the account — who has access to the private key, which must be kept secret — can actually initiate transactions from the account.
CAs, better known as smart contracts, are like mini computer programs that live on the Ethereum network. These accounts are controlled by code – not private keys – but cannot initiate transactions themselves; The EOA needs to send a transaction (you can think of it as a message or an instruction) to the CA for it to do its own transactions.
The problem with EOAs boils down to human error. “The key has full administrative control over your account,” said Gazso, co-author of EIP 4337. “If you lose, that’s too bad, you lose all control of your account forever.”
If you lose a private key to an EOA account, there is no technical support or key recovery process (such as the “reset password” button) that can help you regain access to your funds.
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“Humans are the biggest security flaw in Ethereum account management,” Gazso added. Although there is no hard data on how much ETH is lost due to forgotten keys, Bitcoin (BTC) accounts use a private key system similar to that of Ethereum. According to a report by Chainalysis, up to 23% of all BTC in circulation (or about 3.79 million BTC) could be lost forever due to forgotten keys.
And this is not the only problem. If someone (the hacker thinks) gets their hands on someone’s private key, they’ll have complete control of that person’s money.
How does an AA account work?
Account abstraction solves the shortcomings of EOA and CAs by allowing people to create user accounts with built-in fail-safe mechanisms and other special features to verify transactions.
instead of the [código do contrato inteligente] It is only used to implement application logic, and it will also be used to implement validation logic (nonces [números que podem ser usados apenas uma vez]signatures…) to individuals and user wallets,” Ethereum co-founder Vitalik Buterin explained in a post on his blog in 2021.
Under AA, user accounts can be programmed to include social recovery systems where multiple people—each with their own private key—have the ability to return the account to its owner if access to the private key is lost.
You can also create “multi-signature wallets” (with multiple signatures) that transfer account ownership to a group – requiring several different parties to sign transactions as an extra layer of security.
Accounts under AA can also avoid some of the limitations of other cryptocurrency EOAs. They can, for example, determine how users pay gas fees (fees for executing transactions). Currently, users of EOAs must pay for gas in ETH. But with AA, you can choose to use a different cryptocurrency, like Memecoin (DOGE) Dogecoin, for example, or designate someone else (like a parent or friend) to pay.
All of these systems can be implemented today using CAs, but with a significant degree of complexity and overhead (such as gas costs) due to the requirement that all transactions be initiated by an EOA.
How do we achieve full implementation of the AA agreement?
There are several proposals aimed at adding AA to Ethereum, the most prominent being EIP-4337. “It’s really the first proposal that achieves computation abstraction without the need for a hard fork,” Gazsu said.
The main advantage of EIP-4337 is that its implementation will not require any changes to the underlying Ethereum protocol. The proposal would add a new layer of account abstraction on top of the project’s main protocol, allowing wallet providers to create user-owned accounts that use smart contracts to define rules for initiating transactions.
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But if all of these tools are available today, why isn’t account stripping widespread?
The answer to that is timing. Of course, it is not easy to create a new wallet, launch it and send it to people. “Convincing people to try new technologies and new wallets is a very difficult task,” Gazsu added. This is why individuals starting their crypto journey initially switch to something that has been around longer or has been tested, such as the MetaMask wallet.
So finding people to implement these new technologies seems to be the biggest hurdle in account abstraction. But the tide seems to be turning.
Some Layer 2 (secondary protocols) of Ethereum are leading the way for native AA integration.
StarkWare, the company behind the StarkNet blockchain, is already living with account abstraction. Eli Ben Sasson, co-founder and president of StarkWare, told CoinDesk This account abstraction could be used in the future “to use facial recognition or biometrics to primarily authorize payments [cripto]”, such as how FaceID enables credit card payments for iPhone users. “The infrastructure to do this is now possible on Starknet,” Ben Sasson added.
Last month, Visa also announced its proposal to eventually use account withdrawals to deploy automatic payments with the StarkNet infrastructure. This will simulate automatic payments into a bank account to pay bills, except this can now be done on the blockchain.
Other companies like Gnosis Chain are looking to integrate account abstraction into their infrastructure. Stefan George, co-founder of Gnosis Chain, told CoinDesk that “interest in AA is slowly building as more and more developers and users realize the potential.”
Gazoo emphasized that 2023 will be “the year of stripping accounts,” noting that this is currently one of the most discussed topics in the ecosystem.