Why Seed Phrases Are Here to Stay

Crypto seed phrases aren’t going away for a while.

Yes, many complain that they aren’t newbie-friendly, and so manynew wallets brag about “no seed phrases.”

Doesn’t matter, they’re here to stay. You know why?

One word: INTEROPERABILITY.

Almost every single crypto wallet solution that deviates from this industry standard creates a product that only works with its own tiny ecosystem.

This is especially a problem when you’re talking about recovering funds: most modern backup solutions create a critical dependency on a single company, which is a centralized point of failure.

On the other hand, seed phrases are universally supported in almost every wallet imaginable, can be backed up in limitless ways (hand-written, typed, copy/pasted, screenshotted, etched into metal, memorized, etc.).

This is why even wallets like Tangem and Vultisig that brag about making seed phrases obsolete have had to add in support: because otherwise many would never trust their money to these products.

Funny enough, most modern backups use basically the same kind of backup: either encrypted key shares or a physical NFC device. But they make a critical mistake in not making them interoperable with their competitors.

This is a key economic issue in the space: most companies don’t want to truly innovate and collaborate because they don’t want customers to be able to use their products with competitors.

That shortsighted approach is why so many peddle useless products while giving up massive market share to their biggest competitor: seed phrases, which are free.

So yes, we should have been able to evolve past seed phrases as an industry standard, and we will eventually. Just not for a while, until the space can decide to work together.

Posted Using INLEO