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According to payments giant Visa, cryptocurrency users may one day be able to automatically pay their electricity and phone bills through self-managed cryptocurrency wallets.
In a December 20 blog post, Visa’s cryptocurrency thought leadership team said: Proposed A solution that allows providers to automatically withdraw funds from a users Ethereum-powered crypto wallet without requiring the user to manually sign off on every transaction.
Automatic payment of recurring bills is common in the traditional banking industry, where users choose to pay bills (such as Netflix subscriptions or monthly phone bills) from a bank account of their choice with a particular service provider. can be allowed.
Such a mechanism is not possible for owners of self-managed wallets, and automated programmable payments that periodically withdraw payments from users’ accounts “require engineering work,” Visa said. says.
This is because in a self-custodial wallet you are the only person in control of your private keys. In other words, “smart he contracts cannot initiate transactions by themselves” and must manually approve transactions.
On its technical side, Visa Said A new type of self-custody wallet called delegable account based on the concept of account abstraction (AA) enables automatic recurring payments in cryptocurrencies.
Ethereum co-founder Vitalik Butering put forward the concept in 2015. other Example of use.
Via AA-based self-custody wallets or delegable accounts, the Visa team says user accounts act like smart contracts.
The application will allow users to set up programmable payment instructions to automatically transfer funds from one self-custody wallet account to another on a regular basis without the need for active participation by the user each time. You will be able to push,” the post reads.
This proposal is part of a wider range of crypto-friendly companies research into the New avenues for blockchain innovation And avoiding the rigid requirements hard-coded into Ethereum transactions.
AA has many potential use cases. In particular, it could greatly improve the user experience with digital wallets and increase the flexibility built into user accounts to act like smart contracts.
Catherine Gu (@catgu_) December 19, 2022
The team acknowledges the relative ease with which automatic payments can be integrated via wallets hosted by other parties, such as exchanges, but this, of course, does not allow users to ensure their funds are properly managed by that party. This means that you must trust that
This has proven to be a major risk this year. Bankruptcy of FTXVoyager, Blockphi, Celsius to name a few.
Related: Ethereum bulls wake up for the first time in four years, sending 22,982 ETH
The post also highlights that AA has been proposed as part of multiple Ethereum improvement proposals over the years, but never finally materialized due to implementation difficulties. This is due to many protocol changes and the need to “meet security guarantees”.
The Visa team said it is already experimenting with delegable accounts on its private chain for layer-2 scaling solution StarkNet, as the network supports AA.
Given that the Visa team has thus been able to implement delegable accounts within the StarkNets account model, this post concludes that automatic payments are not far off.
