The key barrier to crypto adoption

Our crypto is cryptographically safe. As long as we do everything right.

One mistake and we can leak our keys. And if our key is leaked, our crypto is gone. Or it goes to the wrong place. Let's say there are two probabilities: p is the probability that you make a mistake yourself, and q is the probability that a hacker exploits your mistake.

This means that when you make a transaction, the chances everything is OK are (1-p x q), which we can simplify to be (1-P). For sure, with decent cryptographic hygiene, both p and q are small. Very small. Thus P which is the product of two small numbers is very very small. But when we make N transactions, our chance of keeping our crypto is (1-P)^N

And this is the problem with adoption. As more and more people use crypto, N gets larger and larger, and the probability of it "working" goes to zero. No matter how small "p" is, and no matter how small "q" is.

The number of economic transactions that a person does is a lot, maybe not in a day, but certainly over a lifetime. An individual's chances of doing everything perfectly, every time, are not 100%. Which should worry any person who did not get 100% on every math test. When we consider there are billions of persons who we hope are one day making many such transactions... we have to also realize that any number close to (but less than) one raised to the power of several billion is almost zero.

Since our intention is to avoid having to "trust" third parties, it's counterproductive to trust third parties to be perfect on our behalf. Or, if we are going to be trusting third parties, we need mechanisms to ensure that they do not abuse our trust (a-la-FTX), which invariably means regulation. Which we hate. Or, more particularly, those who want us to trust them hate... because who in their right mind would want to be subject to regulation of they can avoid it? We need it, but they don't want it.