DeepDive

The Crypto Adoption We’re All Waiting For

The widespread adoption of a new technology occurs when the benefits of using it significantly outweigh the associated costs for the typical user. Blockchain technology is widely regarded as secure and has matured to the point where modern consensus protocols now offer latency and throughput that match or even surpass those of the traditional financial system. Despite this, the technology struggles to find its footing in real-world applications.

Perhaps the most significant hurdle yet to be overcome is secure and accessible key management . Simply put, the private key used to authorise transactions must be stored safely while remaining readily accessible when needed. The ideal solution should be as simple to use as the payment apps familiar from traditional finance, secure beyond a single point of failure, and sovereign without compromise.

In theory, self-custody is the preferred method, as illustrated by the well-known proverb in the crypto community: “Not your keys, not your crypto.” However, this perspective highlights only one side of the issue. In practice, as experience has shown, the flip side reads “Your keys, your crypto to lose,” underscoring the risks and responsibilities associated with managing private keys.

The Paradox of Crypto Security: The Burden of The Secret Key

At the heart of cryptocurrency lies its promise of unparalleled security—a decentralised system where users have full control over their assets without relying on intermediaries. However, this promise introduces a profound contradiction: while blockchain technology itself is secure, the responsibility for safeguarding access to one’s assets—embodied in the form of private keys or seed phrases—falls entirely on the user. This creates an inherent tension between the security of the systemand the insecurity introduced by human error.

Cryptocurrency wallets generate a seed phrase , typically a series of 12 or 24 words, which serves as the ultimate backup for recovering access to funds. This seed phrase is both a lifeline and a liability. It grants users sovereignty but also places immense pressure on them to manage it securely. The risks of having the key lost or stolen falls solely on the user as there is no authority to reverse actions if the key is stolen or keep backup if it is lost.

This contradiction highlights a fundamental challenge: while blockchain eliminates centralised points of failure, the reliance on seed phrases reintroduces a single point of failure —the user themselves. For non-technical users, managing a seed phrase can feel like an overwhelming responsibility, creating a barrier to adoption. The fear of losing access to assets—or worse, having them stolen—can outweigh the perceived benefits of using cryptocurrency.

The Custody Trilemma

Cryptocurrency custody faces a fundamental challenge: balancing security , sovereignty , and simplicity . These three pillars form a trilemma in which all existing solutions inevitably fall short in at least one area.

• Hardware wallets offer strong security and sovereignty, allowing users to retain control over their assets. However, they are often cumbersome to use, making them less appealing for everyday transactions. Additionally—and something not commonly discussed—users are often left with no choice but to trust the developer of the hardware wallet not to implement a backdoor or push a malicious update. They must also trust the logistics chain to ensure the device isn’t tampered with during delivery.
• Custodial solutions , such as exchanges, provide security and ease of use but require users to trust a third party, forfeiting sovereignty and exposing them to risks like insolvency, regulatory intervention, or fraud.
• Software wallets , particularly mobile or browser-based ones, are user-friendly and preserve sovereignty but are inherently more vulnerable to malware, phishing, and key compromise, making them less secure.

Advanced solutions like multisig aim to address some of these shortcomings. Multisig, short for multiple signatures, setups distribute signing authority across multiple parties, reducing the risk of a single point of failure. However, multisig implementations are chain-specific, relying on smart contracts that must be deployed separately for each blockchain where the security is applied. This makes them cumbersome to manage, especially for users interacting with multiple chains. Additionally, multisig solutions can be expensive due to gas fees associated with deploying and executing smart contracts, further complicating their usability.

Similarly, multi-party computation (MPC) or dual-key signatures split private keys into shares distributed across different devices or entities. MPC eliminates the need for a single point of failure, as no single device holds the complete private key. While MPC offers enhanced security and flexibility, it is technically complex and often inaccessible to mainstream users. Furthermore, it requires multiple actions by the user for each transaction, adding friction to the user experience.

No existing solution successfully balances all three properties. Users are forced to make trade-offs: sacrificing sovereignty for convenience, security for usability, or usability for security. This trilemma has long been a barrier to widespread adoption, as the compromises force users into suboptimal choices—whether that means relying on complex key management, entrusting assets to a third party, or exposing themselves to unnecessary risks. 

First To Solve the Trilemma

Heim breaks the pattern of forcing users to choose only two of the three cornerstones of great user experience in crypto. Heim is secure to the tune of having no single point of failure, sovereign by ensuring that private keys are known only to the user, and simple enough to rival conventional payment apps—finally allowing the convenience of single-tap transactions without risking funds being lost or stolen, and without forfeiting sovereignty.

How this is achieved is covered in the next section of the deep dive