10 years of experience in cryptocurrency payments sharing! Have you encountered the same issues as Vitalik Buterin?

Ethereum founder Vitalik Buterin shared his experiences and lessons learned from using cryptocurrency for payments over the past few years in his latest article, while also pointing out the changes that need to be made to address current issues.

This translation and summary of the article are provided, but for any uncertainties, please refer to the original text.

Vitalik's Experience with Cryptocurrency Payments

In this article, Vitalik shared five incidents to discuss issues related to cryptocurrency payments, which will be organized in chronological order.

1. 2013: Vitalik tried to pay with Bitcoin at a sushi restaurant in San Francisco, but the restaurant did not receive the Bitcoin when scanning the QR code for payment. This was due to an issue with Vitalik's phone's network.

Lesson Learned: Vitalik pointed out that the network is not entirely reliable, so P2P payment systems should have certain features such as NFC and the ability for customers to show QR codes to allow them to transmit their transaction data directly to the merchant.

2. 2019: Vitalik tested a new social recovery wallet that splits the account private key into five parts, requiring any three parts to recover the private key. To use this wallet, users need to gather five guardians and have them download an app.

By providing them with a confirmation code, an encrypted link between the user's wallet and the guardians is established through the Firebase app development platform to share the private key with them.

However, after using this wallet for a while, Vitalik encountered several issues, such as guardians losing private keys due to changing phones or the Firebase linking mechanism often malfunctioning, ultimately resulting in Vitalik losing a small amount of encrypted assets.

Lesson Learned: Vitalik noted that secret-sharing-based off-chain social recovery is really fragile unless there is no other option. Additional apps are prone to issues, and separate centralized communication channels also pose risks of failure.

Vitalik believes that the method of adding guardians should be providing them with their ETH addresses, and wallet recovery should be done through smart contracts, using ERC-4337 account abstract wallets to complete the process. This way, guardians only need to keep their Ethereum wallets safe, which is something they are more likely to take care of.

Note: A social recovery wallet can add trusted parties or devices as guardians. When the owner loses control of the wallet, guardians can help recover control by signing special transactions.

3. 2021: Vitalik attempted to save fees when using the Tornado Cash mixer by using the "self-relay" option. Tornado Cash's "relay" mechanism sends transactions to the chain through a third party.

When users withdraw, the withdrawal address usually does not have tokens yet, and users do not want to pay the transaction from their deposit address, creating a public link between the two addresses. Tornado Cash attempts to prevent this issue. However, the relay mechanism is often expensive and charges a certain percentage of fees, which may be much higher than the actual gas fees of the transaction.

To save costs, Vitalik used the relay mechanism for a small withdrawal, which had lower fees. Later, he sent a larger withdrawal using Tornado Cash's "self-relay" feature without using the relay. However, he made a mistake by accidentally operating the deposit address instead of the withdrawal address, creating a public link between the two.

Lesson Learned: Vitalik believes that wallet developers should consider privacy issues more explicitly. Additionally, better forms of account abstraction are needed to eliminate the need for centralized or even federated relays, and to commoditize the relay role.

4. 2021: Vitalik bought tea at a coffee shop in Argentina using ETH and transferred 0.003ETH to the merchant's centralized wallet. However, the transaction was not accepted, possibly due to being below the exchange's minimum deposit amount of 0.01 ETH.

Also, in 2022, when making similar payments elsewhere, Vitalik encountered issues with transactions not going through. In one instance, the problem was that Vitalik's mobile wallet's default transaction only sent 21000 gas, while the receiving account's contract needed additional gas to process the transfer. In another instance, it was due to a UI glitch in Vitalik's mobile wallet that prevented adjusting the gas limit by scrolling down.

Lesson Learned: Vitalik emphasized that a simple and user-friendly UI is better than a flashy but impractical UI. Most users are not even aware of what gas limits are, so better default settings are needed.

5. Across Various Years: Vitalik often finds delays between his transactions being accepted on-chain and services recognizing the transactions, sometimes leading to unconfirmed transactions. Additionally, there are unexpectedly long and unpredictable delays between sending a transaction and the transaction being accepted in a block, sometimes taking seconds, while other times taking hours. However, this has significantly improved after the implementation of EIP-1559, ensuring most transactions are accepted in the next block. Further improvements are made through stable block times after the merge.

However, extreme values still exist, especially when many people send transactions, causing basic fees to skyrocket and transactions to fail. Coupled with the poor UI of most cryptocurrency wallets, which do not warn about rising fees, provide guidance on how to address the issue, or have a clear button to adjust the maximum base fee, exacerbates the problem.

Lesson Learned: Vitalik believes that user experience related to transactions needs improvement, praising Brave Wallet for increasing the tolerance limit of the maximum base fee from 12.5% to 33% and making stalled transactions due to network congestion more visible in the UI.

Various Other Issues

In addition to the aforementioned incidents, Vitalik raised four issues regarding cryptocurrency payments:

1. Many applications still cannot be used with Brave Wallet or Status browser, possibly because they have not done their homework and rely on specific APIs from Metamask. Even Gnosis Safe has not used these wallets for a long time.

2. The ERC20 transfer page on Etherscan, such as this page, is easily forged for fraudulent purposes. Since anyone can issue new ERC-20 tokens, they can be easily exploited for malicious activities.

3. Uniswap previously provided the feature of exchanging tokens and sending them to different addresses. However, Uniswap no longer offers this feature, forcing Vitalik to split the transaction into two, causing inconvenience and wasting gas. Therefore, Vitalik has now switched to using Cowswap and Paraswap.

4. "Using Ethereum Login" is a great feature, but it is still challenging to use when trying to log in on multiple devices, and Ethereum wallets can only be used on one device.

Conclusion of Vitalik's Experience with Cryptocurrency Payments

While in most cases, using cryptocurrency payments can successfully achieve transaction purposes, Vitalik believes that a good user experience should focus on discussing worst-case scenarios. Therefore, even with a trendy and simple UI, strange and unexplainable situations will eventually lead to significant issues. In contrast, wallets that provide more details for users to understand the current situation will offer a better user experience.

User experience is a key reason why global Ethereum users choose centralized solutions over on-chain decentralized alternatives, in addition to high transaction fees.