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By Hsuan Lee, Co-founder & CEO, Blocto
Blockchain technology hit mainstream consciousness more than a decade ago, and since then, we have seen governments, businesses, and consumers experimenting with it. However, it is clear that we have not yet achieved the critical mass blockchain needs to transform industries and societies — global adoption rate still stands at 4.2%.
While digital ownership and assetization have provided a new generation of users with access to financial instruments through blockchain, this is only the tip of the iceberg. The true potential of blockchain lies in Web3, a new internet ecosystem powered by decentralized applications (dApps) that will return privacy and power back to the people — fostering a digital society that is inclusive by design.
The promise of blockchain is a powerful one, but it is not enough to convince the mainstream. For technology to achieve widespread adoption, it needs to go beyond incremental improvements to the status quo. It must fundamentally transform the relationship with its users, so it becomes intuitive and almost invisible to its target audience.
As it stands, the success of crypto depends heavily on the availability of user-friendly onboarding portals. Specifically, platforms and services that provide familiar user interfaces and seamless interactions while hiding infrastructural complexities. More importantly, these platforms need to be interoperable and secure.
The Best User Experience Is One You Can’t Feel
Similar to the early evolution of Web2, the blockchain industry needs to secure buy-ins from both users and developers — users that are willing to engage with platforms and applications, and developers that are constantly working to refine the user experience.
From a user perspective, the first step of onboarding is often riddled with complicated access routes and clunky user interfaces. Digital wallets that hold digital assets such as cryptocurrency or non-fungible tokens (NFTs) are great examples because they serve as the first step into the world of Web3. This is why many wallets utilize Web2’s user experience design, allowing users to explore Web3 in a familiar environment. Traditional Web2 cues such as email or social logins, passcode recoverability, and two-factor authentication are used to onboard users, while giving them full control of their wallet keys and user IDs as they set up their crypto wallets.
From a developer perspective, a comprehensive infrastructural toolkit is essential to provide them with resources so they can build with confidence. Complexities such as incompatible languages, protocols, and security solutions present high barriers to entry, even for the most experienced of developers. This points to a need for Web3 software development kits (SDKs) that intersect Web2 interfaces across mobile (iOS, Android), web (JavaScript), and game engines (Unity).
The best wallet is one that feels non-existent. Users should not have to understand the underlying technology, or even be aware of its existence. The wallet functionality should be deeply integrated into the apps used, be it digital banking, gaming, or social networking — it should not be seen, nor felt. This is key to moving the needle for Web3 adoption.
Building Trust In A ‘Trustless’ Environment
While Web3 is built upon the core idea of decentralization and security, the reality of implementation is such that decentralization will always lie on a spectrum. Scaling a full-fledged decentralized experience for mass market users is near-impossible — this is a phenomenon famously coined by Ethereum founder Vitalik Buterin as the blockchain trilemma.
In fact, full decentralization does not guarantee security. There has been extensive documentation on security damages exploited by highly skilled bad actors.
This is why trust is key to securing the success of decentralization — and trust can only be built with transparency. Users need to be fully aware of the actions they take and the risks involved at every step of the process across all transactions they perform. This is especially crucial when funds are being moved from one place to another. Active and clear communication by a wallet provider can ensure that users are fully informed of their decisions, and is fundamental to establishing trust.
The Future Of Your Digital Self
Web3 is a future where people and organizations enjoy true ownership of their digital identity, data, and assets. It is a future that is inclusive by design, a stark contrast to the walled garden of Web2.
The digital wallet will play a critical role in realizing the promise of Web3. More than just a place that holds your crypto assets, it will define who you are, and what you stand for. As a representation of users in a decentralized environment, the Web3 wallet will galvanize a new generation of digital natives to act on causes they truly care about.
The Web3 version of real-world-based identity is represented by decentralized identifiers (DIDs). Information collection typically conducted through Know-Your-Customer (KYC) processes is supplemented with blockchain-native identity, comprising soulbound tokens (SBT) and transaction history. Together, this forms the bedrock for a decentralized society, as individuals control their identification credentials, affiliations, and communities.
As blockchain technology continues to make its mark globally, it becomes clear that crypto wallets will be the catalysts that facilitate the onboarding of users into the world of Web3 at scale.
It is worth noting that chain-agnostic and interoperable wallets will serve as powerful portals that will ensure users are onboarded in a simple and seamless manner. By providing a frictionless user experience, users can then participate in the crypto economy confidently.
About the Author
Hsuan Lee is the Co-Founder and CEO of Blocto. Hsuan has been listed as one of the 21 most influential people in Taiwan’s blockchain field, which he has been actively developing since 2015. Previously, as VP of Engineering, he helped build DEXON into one of the top performing blockchains at the time. Traveling around the world as a crypto nomad, Hsuan continues to push for a culture of innovation and the mass adoption of blockchain with Blocto Wallet, made by portto.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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