Over 15 years ago, Satoshi invented the world’s first independently managed, self-operating financial system through cryptography. He aspired to push us all into a financial renaissance where our aging financial system would be replaced with one that favors no one entity or being. A fully transparent financial system that’s open 24 hours a day, seven days a week, so that anyone can track fund flows on the blockchain.
And while this value proposition alone is more than sufficient to migrate from our legacy financial systems, Satoshi’s greatest breakthrough with the invention of blockchain and crypto is how a user accesses this network: a non-custodial wallet.
With only a mobile device and an internet connection, anyone can safely view, send, and receive value, which is the closest we’ve been to a financially inclusive world.
That being said, the blockchain industry, which can be more eloquently referred to as web3, has reached an inflection point where the next wave of adoption will likely come through entirely different channels than generations past. In other words, there are only so many new entrants that would have the inertia to deal with the operational headache of engaging with web3 technologies, given the relative return or utility of the technology is largely not there for the next generation of users. Coinbase CEO Brian Armstrong alluded to this on stage at the All-In Summit this year.
To be frank, market standards for an acceptable web3 user journey must improve if we want greater adoption amongst discovery audiences. The wallets attached to those user journeys need to do more than hold internet money if we expect those people to use them.
Why It Matters
The term ‘web3’ refers to the third iteration of the internet, which is built on the concept of digital, verifiable ownership. Contrary to the web2 paradigms, web3 users maintain and own all their information, financial assets, digital collectibles, and more, while ‘Big Tech’ holds this dear information in the web2 universe.
This ownership is achieved through non-custodial wallets where this information is only accessible by the owner of said wallet. The wallet owner can grant ‘read-only’ access to any internet protocol that might want to access the wallet’s contents, but again, it’s purely at the owner’s discretion.
In the words of the one and only Gordon Gekko, “The most valuable commodity I know of 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. Moreover, a certain level of implicit trust makes them feel secure with ‘owning’ nothing.
Sure, they can view and access the bank account balance shown on their account, but they technically ‘own’ something that’s continuously being lent out in exchange for crumbs. What’s more, users completely rely on a bank’s good faith to perform any action they wish to perform. This model is deeply flawed and hardly works here. Still, as you venture into the lesser-developed parts of the world, the overwhelming distrust of traditional banking systems has left much of the population unbanked.
It All Starts With the Wallet
We’ve made significant strides over the last decade and a half regarding developing, using, and adopting decentralized technologies. Additionally, regulatory clarity and legal recognition from governing bodies worldwide have recently accelerated, with Shanghai, most recently, recognizing Bitcoin as a digital currency. That said, it’s still painfully difficult to access and move value that’s on-chain, given that the interfaces that connect us to the technology are shockingly underdeveloped compared to the sheer size of the industry.
Currently, crypto wallets don’t allow you to do anything you couldn’t otherwise do with traditional banking products. Because transmitting value within this framework is arduous, Bitcoin’s battle to establish itself as a reasonable means of payment has been thwarted. Instead, crypto wallets are more or less an easy way to individually secure your (way more volatile) funds.
Furthermore, it’s never been more difficult to garner the attention of the general consumer. Popular media, short-form content, and a little bit of ADD have made it excruciatingly difficult for companies to reach target consumers. Because of this, the most successful technologies provide a utility that introduces extreme convenience or consolidation in one’s life. Take TikTok, for instance — beyond being a means of creative expression, it also serves as a social network and, increasingly, a search engine.
By serving multiple purposes, the value proposition for installing and spending time on the platform is strengthened because users enjoy the luxury of not jumping from platform to platform. In 2023, the average person has about 80 applications installed on their phone, nearly 2x more than a decade prior.
Because of this, we’re now entering a new era in tech in that new products and applications will need not only to solve a problem but also introduce convenience — a wallet is no different than that. This isn’t all that dissimilar from when Apple put a phone into the iPod all those years ago.
The Future
To unlock all of crypto’s potential, we must innovate from the ground up and ensure that an unnecessarily archaic user experience doesn’t obstruct its value proposition. We need to push paradigms and challenge established conventions to ensure that we spend the majority of the next 15 years building a new, free world instead of struggling through teaching our friends and loved ones about public and private keys.