Source: Bitcoin Magazine; Translated by: Wuzhu, Golden Finance

There are about 500 million cryptocurrency users around the world, but the most optimistic estimate is that only 2.5% of people are using hardware wallets. This number is small, but I'm glad that this number isn't higher.

Why? Because I want a billion people to use Bitcoin, I want to see everyone safely keep their wallets. The consumer hardware wallet industry is one of the biggest obstacles to achieving this goal. And it’s not just Bitcoin adoption: if we don’t address the core fatal flaws of the world’s most popular wallets, the entire decentralized revolution will be at risk.

Last year, Lucien Bourdon celebrated the 10th anniversary of the wallet revolution on these pages. I agree with a lot of points, but there is one obvious omission. Almost without exception, the "leading" consumer hardware wallets in the market today have little innovation in a decade. As every security expert knows, if you don’t keep improving, you are going backwards.

The problem is not just that new threats continue to emerge, but that Bitcoin use cases are developing rapidly. Bitcoin and other cryptocurrencies are no longer “mere” stores of value; they are now the medium of various increasingly complex transactions. However, the underlying technology of hardware wallets has basically no change compared to when their main purpose is secure offline key safes. The same goes for the user experience, where users still need to write down their seed words and then squint at a small screen every time they want to approve a transaction.

This is not just a problem with Bitcoin. A secure future will be for everyone to protect our most valuable digital assets and sensitive data with encryption keys. In fact, the entire decentralized economy relies on what is in these wallets - let's take a look.

Lucien is right to emphasize that Bitcoin’s strengths come from its commitment to the open source principle. I totally disagree with his point that "most of the wallet industry" adopts open source.

In fact, the leading hardware wallet is still built on closed-source proprietary systems that users cannot fully check. If they can't check, they can't verify; if they can't verify, why should users trust the manufacturer's statement?

I suspect that the reason so many hardware wallets are still "black boxes" is because they have hidden things—such as the smart card technology decades ago that Bitcoin users delegate their keys to using. This technology is not suitable for today’s cryptographic use cases, and certainly not for future decentralized security, where we need keys to protect everything from our digital identities to access credentials.

Hardware wallets continue to rely on closed proprietary systems, which is not only a security nightmare: it is also very unfavorable to Bitcoin’s innovation and adoption.

The wallets today are actually a closed garden, and developers must follow strict rules,Users cannot be provided with any level of customization. This is not just for control; usually, it is the function of the underlying technology. Devices like Ledger need to give each application access to the main seed; obviously, this means they have to undergo a rigorous scrutiny before they are approved (if they are indeed approved).

If the App Store works this way, we will still carry the Nokia 3310 with us. Instead, we have an open ecosystem, a thriving developer community, competition and a large number of great applications.

This is what I expect from my wallet. When developers are able to build without permission, they can not only provide novel features and enhanced user experience, but they will also play a major role in the evolution of their wallets to support (and protect) increasingly complex Bitcoin applications.

Wallets should be the center of innovation, and are the place for developers to build killer applications that will force people to adopt Bitcoin and blockchain-based services. In fact, an ecosystem like Ledger is a “reaction store” that hinders decentralized innovation rather than pushing it forward.

The solution is both simple and essential: transparency. Just as powerful encryption relies on open-source algorithms that are publicly tested to ensure security, devices that store encryption keys must follow the same philosophy. Open source hardware and software enables security researchers, developers and even individual users to review and verify security measures, reducing reliance on manufacturer statements and increasing overall credibility.

Updated, safer alternatives already exist. Hardware wallets based on open source microkernel architecture provide a stronger security basis, allowing independent verification of their security. These systems ensure that no company controls the security of user encryption keys, reducing the risk of hidden vulnerabilities and promoting innovation.

The good news is that only one in 40 crypto users currently own hardware wallets. Let’s make sure that 39 others are provided a truly safe way to keep their digital futures themselves – and support innovations that will attract billions of people to adopt.