There are many expectations that 2024 will be a boom year for Web3.
But while this may be true regarding markets, it does not mean much if the average user cannot participate comprehensively.
We are stunting our growth by overlooking a huge bottleneck – portfolios.
Everyone can agree that wallets are not good enough.
But what if, for a moment, we took a step away from the technical barriers of wallets and thought about the associations of the term “wallet”? The entire cryptocurrency industry already has a reputation of being a bit of a boys' club, so does using the name “wallet” help this cause?
Instead of wallets, can we get wallets, handbags and briefcases? Can they be customized to enable the user to expand their personality in the same way that a fashion-conscious person might carry a designer bag or someone might wear custom shoes?
The different formats may also be attractive to brands looking to enter Web3. A Louis Vuitton crypto handbag or a Mulberry wallet will probably be more attractive to those looking to create a cryptocurrency wallet.
Regardless of the names, we lack diversity in brands, and year after year, we see little improvement made to the wallet experience. Those that are done are either ineffective, focused on specific communities, or are incredibly expensive.
If the cryptocurrency industry wants to create a financial system that provides real, customizable value to people, we need to double down on designing wallets that are used for more than just trading, and are attractive to both casual and basic consumers.
Wallets have a reliability problem
Cryptocurrencies were initially designed as a global financial system, accommodating those disconnected from the global economy. Billions of people live in countries with struggling economies, high inflation rates and weak financial infrastructure. They rely on using cryptocurrencies as a trusted financial asset rather than a speculative asset class.
However, the current Nigerian court ban on cryptocurrency exchanges and the subsequent debacle with Binance suggest that exchanges remain the main avenue for cryptocurrencies, with wallets lagging behind. why is that?
Simply put, the learning curve for portfolios is steep. Terms like transaction hashing, gas, nonce, smart contracts, hot/cold data storage, and many others are also scattered across the interfaces without much guidance or explanation.
Read more from our opinion section: Crypto is quite the Lego financial system – and that's a good thing
The portfolios in their current iteration are geared towards traders who choose to profit from speculation in the industry. This is how the memecoin craze ended up dominating the headlines.
From a security point of view, wallets suffer from poor security measures that leave users vulnerable. This has led to many breakouts and “fat toe” moments as seen in major companies such as Paxos And AlamedaResulting in the loss of millions.
These incidents encourage users to install additional third-party software to enhance the security of their wallet, which in turn increases their exposure to malware. This creates a challenging experience that proves difficult for the most experienced users in the industry, and even more so for newcomers.
As people get frustrated with using wallets, we end up stifling the adoption of cryptocurrencies. Users who join turn to trading platforms, which can be more risky as we have seen, or avoid entering the field altogether.
Wallets still have a long way to go before they are recognized as a reliable financial tool for the average person.
where is the difference?
Aside from the design and reliability issues, we are also faced with the fact that wallets struggle to make a name for themselves.
Dozens of new wallets work the same way as each other. Moreover, leading exchanges have also joined the fray, announcing the launch of their own wallets. Judging by their detention records and mismanagement of user funds, this does not look particularly encouraging.
We're left with a homogenous group of portfolios that primarily accumulate revenue or make up numbers.
Ultimately, people want to use financial tools to fulfill everyday transactions like buying groceries and paying rent. Inviting the user into the decision-making process will allow them to contribute to the implementation of the features they want to see in their wallets. Furthermore, it provides a way for wallet providers to organically develop distinct brand identities, much like we see with DAOs and NFTs.
Pave the way forward
We can start by taking a page from the book of experienced banking and fintech players, implementing measures such as reducing information density, moving to mobile and building security measures that are easier to understand and use.
Combined with the design customization that cryptocurrencies offer, and in fact encourage, we can reshape the cryptocurrency wallet experience once and for all, moving beyond technical interfaces so that users can manage their digital asset holdings intuitively.
Achieving this would be a big step towards enhancing the DeFi experience. Users will no longer have to rely on checking Crypto Twitter to see if there is a problem with the app they have placed their savings in. Instead, they will have access to real-time alerts of any hacks or scams.
If we want to enrich the wallet experience, we must look beyond cryptocurrencies as a pure payments system and start leveraging their ability to function as a social class. Cryptocurrencies have the ability to bring communities together based on alignment of interests, and wallets are well-positioned to leverage this social infrastructure.
Martin Goiculia Scott is the product lead and creator of Zeal. His journey into the cryptocurrency space began in 2017, with his quest to make personal finance accessible and user-friendly. Since then, Martin has spent his time focusing on making personal finance and payments easier and friendlier. Martin has extensive experience in technology, having served as Head of Growth at Mach, Head of Office at Revolut, and Head of Product and Growth at educational technology company EdTech.
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