Just like physical wallets are essential for safeguarding personal belongings like cash and cards from theft, exposure, or damage, crypto wallets that store cryptocurrency, digital identities, and NFTs are poised to play a critical role in the near future as they are a gateway to Web3 adoption. Digital wallets are the backbone of the blockchain industry. Without them, it would be almost impossible to perform crypto transactions from peer-to-peer transfers to trustless logins for Web3 applications.
Web2 giant Facebook’s rebranding to Meta in October 2021 to promote Web3 and the Metaverse and the decision by Twitter and Instagram to adopt NFTs signaled the beginning of Web3 adoption. As the world steps toward an inevitable revolution to the next iteration of the internet, businesses of all sizes could use crypto wallets to connect with their consumers and understand their behavior the same way Web2 companies use cookies today.
Since we’re still in the early days of Web3 and its mass adoption is yet to take off, this article explores the changes crypto wallets should make to enhance Web3 adoption. Welcome on board.
Crypto wallets are a digital medium that allows users to store, secure, and manage digital assets like cryptocurrencies, NFTs, etc., and owners must cryptographically sign and authenticate. The premise that for a long time held crypto wallets mainly as storerooms for crypto assets makes them necessary because you can’t store digital assets in a physical wallet or under your pillow.
However, the simplistic crypto wallet becomes boring as it fails to deliver beyond the purely single transactional use case and perspective to the interactive 3D view envisioned in Web3 and the Metaverse era. The benefits of a truly decentralized web as conceived under Web3 can only be enjoyed thoroughly via futuristic advanced crypto wallets beyond mere storerooms for digital assets.
Since crypto wallets are the gateway into the exciting decentralized world of Web3, ultramodern digital wallets must be such that they enable users to bypass the walls created by the centralized Web2 internet monopolized and controlled by tech giants. Startups intent on increasing Web3 adoption must address the question of utility as the first step in connecting emotionally with potential consumers. To transcend the level of merely being a storeroom for digital wallets and become an expression of who users are and what they can achieve online, crypto wallets of the future ought to have the following features:
Most Web3 projects are built on different blockchains, and because most cannot interact with one another, most users cannot quickly transfer digital assets to other crypto wallets. The result has been tribalism in Web3 as some project groups can interact while others cannot, thus reducing the possibility of faster adoption.
Interoperable crypto wallets that can easily interact with different blockchain and Web3 ecosystems will be more convenient and eliminate cases of siloed digital assets. Crypto wallets facilitate interoperability across blockchains, and more collaboration between projects and making transactions straightforward and seamless could foster mass adoption.
Web3 builders and startups must urgently address the challenges that new users face if they’re going to create seamless new customer incorporation. The hype surrounding Web3 projects like cryptocurrencies, NFTs, or the Metaverse hasn’t been matched by the specifications of DApps and crypto wallets. Even as more people begin relating with Web3, mainstream adoption has been slowed down by wallets that lack user-friendly interfaces or positive user experiences.
The centralized Web2 internet has thrived on a login process that relies on usernames and passwords for anyone accessing social media, e-banking accounts, or different Apps. Instead of being allowed to create an alpha-numerical password that one can remember, Web3 users are supposed to remember a 12-word seed phrase at the risk of permanently losing their digital assets if they forget or misplace the phrase. Now Web3 users accessing decentralized exchanges or DApps are supposed to connect crypto wallets that require self-custody.
Isn’t it ironic that in an age where people are gravitating toward convenience, Web3 projects can expect users who have difficulty remembering simple passwords to safely keep their wallets’ keys? Developers must create a more straightforward onboarding procedure since few users have the time and patience to read long onboarding articles and guides or watch endless videos trying to explain how to open an account.
Introduced in the 1990s, Near Field Communication (NFC) is a wireless communication technology that enables devices at a close range to communicate with each other. The NFC protocol can be integrated to facilitate peer-to-peer transfers for files and data or make payments via NFC-enabled devices using tap-and-pay procedures. Everyone remembers how countries restricted the use of physical cash during the Covid-19 pandemic, opening the way for blockchain technology as an alternative.
As countries and organizations gravitate more toward touch-less payment methods, Web3 projects must look toward creating crypto wallets that can be used to send, receive and store digital assets. It should be possible to develop hardware-based, software-based, or even paper-based NFC-enabled crypto wallets that would be convenient and easy to use.
With a 2021 survey by Visa showing that consumers now prefer cashless payments since the Covid-19 pandemic, contactless crypto wallets that could allow them access via cellphone, etc., will most likely promote Web3 adoption. Merchants would embrace NFC-enabled crypto wallets because their payments would be recorded in the immutable digital ledger, besides being able to exchange crypto payments to fiat currency seamlessly. Such payments would also be instant, and the absence of third parties would ensure no one takes additional transaction fees.
The user interface (UI) and user experience (UX) of most Web3 projects are far from being user-friendly and intuitive. The overall ecosystem and tools, such as crypto wallets, are not only complex and grumpy, but they slow down adoption and retention. Users detest the existing crypto wallets that demand they memorize 24 or so words to exchange digital assets or protect their wealth from hackers, which isn’t precisely comprehensible. Even experienced users who enjoy the Web3 space can find the process confusing and cumbersome and often feel discouraged by the friction and complexity of DApps and crypto wallets.
Whereas developers are concentrating on creating decentralized products, crypto wallet creators must strive to ensure the crypto wallet of the future is seamless and has a simple, user-friendly experience, something akin to the Web2 experience. Ultimately, using a web3 crypto wallet should become as easy as sending an email or logging into social media.
The proliferation of malicious DApps trying to exploit data-rich systems carrying valuable information has made some potential users conclude that Web3 isn’t yet safe or private. This is especially true for cases where hackers have been able to circumvent passwords and two-factor authentication where users have been hoodwinked into voluntarily but unknowingly signing malicious contracts.
Crypto wallets must now be equipped with a knowledge graph as a security measure, especially when they contain sensitive information about finances, health, and personal identity. To foster Web3 adoption, crypto wallet manufacturers must lay down stringent security measures if they’re going to change the narrative surrounding privacy in such a way that they can strike a balance between anonymity, transparency, and the need for a secure ecosystem. A good option would be crypto wallets that can be unlocked using biometrics like face unlock or mobile devices.
The Web3 promise is to use decentralization to tackle the monopoly of Web2 tech giants or intermediaries like Twitter, Google, Facebook, etc. Since crypto wallets are the gateway to Web3 reality, creators must avail of features that allow seamless real-time data portability. Users are likely to be drawn over when they feel they are in control of their data, which can only happen via crypto wallets. Futuristic crypto wallets must-have features that help reorient users from a Web2 internet that demands a new account for every App to a seamless, frictionless, and fully decentralized Web3 where one crypto wallet is all they will need to become part owners of their data.
