More than fifteen years ago, Satoshi invented the world’s first independently managed, self-operating financial system using cryptography. He strove to thrust us all into a financial renaissance in which our aging financial system would be replaced by one that favors no entity or being. A fully transparent financial system that is open 24 hours a day, seven days a week, so that everyone can track the flows of money on the blockchain.
And while this value proposition alone is more than enough to migrate from our legacy financial systems, Satoshi’s biggest breakthrough with the invention of blockchain and crypto is the way a user accesses this network: a non-custodial wallet.
With just a mobile device and an internet connection, anyone can securely view, send and receive value, the closest thing we can get to a financially inclusive world.
That said, the blockchain industry, which can more eloquently be called web3, has reached an inflection point where the next wave of adoption will likely come through entirely different channels than previous generations. In other words, there are only a limited number of new entrants who would have the inertia to deal with the operational headaches of dealing with web3 technologies, as the relative returns or usefulness of the technology are largely non-existent for the next generation of users . CEO of Coinbase Brian Armstrong alluded to this year on the stage of the All-In Summit.
Frankly, the market standards for an acceptable Web3 user journey need to improve if we want greater adoption among the discovery audience. The wallets associated with these user journeys must do more than just hold internet money if we expect those people to use them.
Why it matters
The term ‘web3’ refers to the third version of the internet, which is built on the concept of digital, verifiable ownership. Unlike the web2 paradigms, web3 users maintain and own all their information, financial assets, digital collectibles and more, while ‘Big Tech’ stores this valuable information in the web2 universe.
This ownership is achieved through non-custodial wallets, where this information is only accessible to the owner of the said wallet. The wallet owner can grant ‘read-only’ access to any internet protocol that wishes to access the wallet’s contents, but again, this is purely at the owner’s discretion.
In the words of the one and only Gordon Gekko: “The most valuable asset I know is information”, and depending on where you live, your willingness to share that information may vary. In the developed world, the average person has the luxury of robust banking and money transmission services. Furthermore, a certain level of implicit trust makes them feel safe in not ‘owning’ anything.
Sure, they can view and use the balance in their bank account, but technically they “own” something that is constantly being lent out in exchange for crumbs. Furthermore, users completely rely on the good faith of a bank to perform any action they wish to perform. This model is very flawed and barely works here. But when you move to the less developed parts of the world, the overwhelming distrust of traditional banking systems has affected much of the unbanked population.
It all starts with the wallet
We have made significant progress in developing, using and adopting decentralized technologies over the past fifteen years. Furthermore, regulatory clarity and legal recognition by governing bodies around the world have accelerated recently, with Shanghai recently recognizing this Bitcoin as a digital currency. That said, it is still painfully difficult to access and move value along the chain, as the interfaces that connect us to the technology are shockingly underdeveloped compared to the sheer size of the industry.
Currently, crypto wallets don’t let you do anything you couldn’t otherwise do with traditional banking products. Because it is difficult to convey value within this framework, Bitcoin’s struggle to establish itself as a reasonable means of payment has been thwarted. Instead, crypto wallets are more or less an easy way to secure your (much more volatile) funds individually.
Moreover, it has never been more difficult to capture the attention of the general consumer. Popular media, short content and a bit of ADHD have made it unbearably difficult for companies to reach the target group. Because of this, the most successful technologies offer a utility that introduces extreme convenience or consolidation into a person’s life. Take TikTok for example: it is not only a means of creative expression, but also functions as a social network and, increasingly, a search engine.
Serving multiple purposes strengthens the value proposition for installing and spending time on the platform, as users enjoy the luxury of not jumping from platform to platform. The average in 2023 person has about 80 applications installed on their phone, almost 2x more than ten years earlier.
As a result, we are now entering a new era of technology where new products and applications must not only solve a problem, but also introduce convenience – a wallet is no different. This isn’t all that different from when Apple put a phone in the iPod all those years ago.
The future
To unlock crypto’s full potential, we need to innovate from the ground up and ensure that an unnecessarily archaic user experience doesn’t get in the way of its value proposition. We must push paradigms and challenge established conventions to ensure that we spend the better part of the next fifteen years building a new, free world rather than struggling to educate our friends and loved ones about public and private keys. .
