Many compelling use cases serve as reasons to be excited about blockchain technology, but the current state of wallet addresses is not at the top of that list.
Traditional blockchain wallet addresses are long strings of letters and numbers that represent an address on the blockchain. These addresses are created with public-private key cryptography. In other words, they can be used to both send and receive funds or other types of transactions, such as proving item authenticity, over the internet without ever revealing personal information.
Typically when you create a new address, it generates two parts: a private key (which should never be shared) and a public address (which can be shared with anyone).
Aside from being too long and complex, other factors that limit modern blockchain wallet addresses. There are better solutions to the traditional wallet address that can be effectively implemented to utilize blockchain better.
Issues with the Modern Blockchain Wallet Address
There are several issues with blockchain wallet addresses as we know them today. As we’ve seen over the last decade or so, different blockchains have alphanumeric wallet addresses that are too long and impossible to remember.
For example, Bitcoin addresses are between 26 and 35 characters. That is like writing a new alphabet to send someone money. That is not very user-friendly. The other issue is that wallet addresses are not built for storing ordered data sets which will be increasingly important in Web 3.0.
Lack of Usability
The usability of crypto addresses has been a matter in question for years. There has been a history of users being confused about using encryption, especially at first. Other surveys have shown that users are more comfortable using credit cards because they are easier to use (NYM Technologies). Yet, the long alphanumeric key is still the prevalent system.
Why URL-Based Identity Addresses Are Better
Unlike the traditional blockchain wallet addresses that are long and limited in what they can store or send, Accumulate has launched a protocol that is rooted in identity. These identity URLs operate similarly to how a website works with a domain and a key. However, they are multifunctional. Accumulate’s identity-based protocol is useful for organizing objects like data structures and financial records. These URL-based digital identities can do things like manage data, tokens, and other identities.
The tokens can also be programmed to perform complex tasks like governance, off-chain consensus building, and multi-signature transactions.
As we explain in this technical guide, Accumulate Digital Identifiers (ADIs) can receive tokens like a Bitcoin address, issue smart contracts like an Ethereum address, and perform a set of more complex tasks like key management. Similar to how a website owner can modify content or security features, so can the owner of an ADI when managing identity. That’s because ADIs are UTF-8 encoded in the same way that websites are. What does this mean exactly?
Owner and directory paths are very indexable since you can specify various pages and associate each one with a single domain. The same can be done with ADIs. Again, they are UTF-8 encoded and URL indexable.
The design of ADIs allows for more easily readable names with easy integration for browsers and enterprise tech stacks:
An example of an ADI URL for an identity with the name “IglooPlanet” would be:
If ADI IglooPlanet contained a token chain named “IceTokens”, the chain URL would simply be: acc://IglooPlanet/IceTokens
Other Benefits of URL-Based Addresses
The benefits of identity-based blockchain addresses don’t just stop with usability and simplicity. Some of the other benefits ADIs include:
- Further promotes real-world integration in blockchain
- Highly programmable toward many different token use cases
- More individual-focused and not just what is easiest for the developer
Blockchain wallet addresses that are prevalent across protocols today have to change in order to keep up with the ease of usability and meet the use cases that are demanded. Identity-based URLs that bear more similarity to website domains can be the next direction that blockchain addresses move in. Accumulate’s ADIs allow for blockchains to have easier integrations with the real world as well as easier interactions with the web since so much of the internet is based on URLs.
Read more about Accumulate’s Identity-based blockchain in our blog.