Naming things for the people who use them

It’s very common to call the app where we keep our cryptocurrency a “wallet”. But the coins aren’t in the app. They aren’t on the phone, the computer or any device we have at home.

Does the name matter? More than it seems.

What a word promises

Interfaces live on metaphors. The desktop, the folder and the bin help us understand something new through something we already know. They work beautifully as long as the metaphor matches reality.

Designers call this a mental model: what a person believes about how a system works. It doesn’t have to resemble how it really works. And when the two drift apart, mistakes follow.

A leather wallet holds notes inside. Lose it, and you lose the money. A crypto “wallet” works the other way round: lose your phone, and your coins are untouched, as long as you still have the 12 or 24 words of your seed. And if someone gets hold of those words, they can take the funds even while the phone is still in your pocket. The word promises exactly what it isn’t.

The three pieces hiding in a wallet

What we usually call a wallet actually does three different jobs, and it’s worth telling them apart.

The node keeps a full copy of the network’s history, checks that every transaction follows the rules and is what really knows how much each address holds. Bitcoin Core, for example, is the most widely used node software on the Bitcoin network.

The client is the app we use every day. It asks a node for balances, prepares transactions and sends them to the network once they’re signed. Sparrow is a good example of a Bitcoin client: it can connect to your own node or to someone else’s.

The signing device looks after the private keys and signs transactions, usually without ever connecting to the internet. COLDCARD, Trezor and Ledger are a few examples. They’re often called “cold wallets”, although they don’t hold any coins either: they hold the key.

When the name misleads

Someone who thinks of “a wallet” sees one thing, and the important decisions stay hidden inside it.

The first is privacy. Most clients connect to third-party nodes by default, to save you downloading the whole history. It’s convenient, but that third party can see which addresses you look up and link them to you. If you don’t know a node exists, you can’t choose one.

The second is security. Many clients let you keep the keys on the phone or computer itself, connected to the internet all day. This is what’s known as a “hot wallet”. For small amounts it may be enough; for a lifetime of savings, it’s worth moving the signing to a separate device. But to choose between the two, you first need to know they’re two different pieces.

Naming for the people who use it

This lesson isn’t only about crypto. Every digital product makes naming decisions every day, and each one builds or breaks the mental model of the person using it.

Gmail is a good example. Next to “Delete” it has a button called “Archive”, which takes an email out of the inbox without deleting it: it’s still there under “All mail”. Two different words for two different actions, and each one describes what happens, not how it works underneath.

A few simple guidelines go a long way. Name things for what they do for the user. Use the words people already use, even if they aren’t the technical ones. And once you’ve chosen a name, keep it the same across the whole app.

The first-time test

A well-chosen word teaches how something works without a manual. A poorly chosen one forces people to unlearn, and sometimes they learn the hard way.

Next time you name a button, a section or a whole product, ask yourself what someone seeing it for the first time will believe. If the answer matches reality, you’ve chosen well.