The world we are building towards will see users own assets of all classes from the tangible to the intangible. These assets will manifest themselves in the form of various token protocols on the Ethereum network. In the future all tokens from those that represent your PlayStation, your house and your gold to tokens that represent voting rights and even your own identity, will be held in your [Token] wallet, with functionality unimaginable today.

In this future the user cannot be permitted to run any risk of losing their assets, however careless they might be. The world as it exists today is no where close to this; all storage solutions suffer from critical vulnerabilities and severe compromises.

We identify this risk as one of the core problems preventing the further proliferation of the technology into the mass market.

Token is on the verge of launching the next gen platform that tackles these issues head on. The need for a wallet that reduces risk of loss to close to zero is paramount. We’ve built it, it’s about time, it lies as the heart of our platform, and it’s called the Token Wallet.

Legacy wallet types and core weaknesses

Today there are roughly 4 ways to store digital assets. None are ideal:

Type 1 — Keypairs

The defacto and most raw method of storage, a keypair, if compromised does nothing to prevent an attacker from taking every last Gwei. The root of much worry and sleepless nights for big hodlers. Keypairs also don’t offer any recourse or protection if the user loses or forgets their seed. I have old friends who’ve lost dearly because of keypair shortcomings, and we don’t wish this on anyone.

Type 1b — Hardware wallets

Hardware wallets essentially airgap a keypair, they offer an increased level of security but at the expense of usability with a high barrier to entry. They fall short in bringing crypto to the masses and frankly we will probably never see regular users walking around with ledgers dangling around their necks.

They are nice, but ultimately half-way solutions and symptoms of a larger problem. Our goal is enable anyone, anywhere to join this revolution and be properly setup in minutes not days with no upfront cost.

Type 2 — Multi-sig wallets

Multiple signature wallets (Multi-sig), require multiple keys (ideally different people or companies) to sign a transaction before it can be completed.

On Ethereum this functionality has been recreated with smart contracts. The Ethereum Foundation, Consensys, Gnosis, and (tragically) Parity, have all built their own implementations.

These Institutional Contract Wallets are designed to serve projects or companies that hold large amounts of funds and need to share and limit control internally. They are not at all suitable for regular users, in addition to being notoriously hard to use.

Sidenote: even custodial counterparties like BitGo cannot be relied upon.

Type 3 — Custodial wallets

The inadequacy of the above storage types, as well as laziness and consumer apathy drives many to store their funds in the control of third party, primarily exchanges. These custodial wallets, become large centralized targets for attackers. Withdrawal issues, fractional reserves and catastrophic loss are still all too common in the industry. Trust is often misplaced.

Finally, custodial wallets undermine the point of cryptocurrency to little benefit. Being in control of your own funds is one of the things that makes the tech so powerful. Exchanges serve largely as storage for less sophisticated users, only a small percentage of funds they store are actually exchanged. It should thus be considered an embarrassment to our industry that we are incapable of building an attractive, yet technically sound consumer product.