(Kitco News) – Increasing cryptocurrency adoption has been the goal of crypto proponents since Bitcoin’s (BTC) inception in 2009, as they see digital assets as the answer to non-stop money printing by global central banks.
The crypto market has seen tremendous growth over the past 15 years as evidenced by the thousands of tokens available in the market and a Bitcoin price above $60,000. But the asset class remains a black sheep in the eyes of many investors despite the launch of spot Bitcoin ETFs on the U.S. market.
According to Jess Houlgrave, CEO of WalletConnect, for crypto to move beyond the current level of adoption to reach a wider audience, developers need to stop developing new blockchains that add little value to the ecosystem and instead focus on improving user interfaces (UI) and the overall user experience (UX) as a way to usher in the next cohort of ecosystem participants.
“Simply put, without good UI/UX, we’re not building for users,” Houlgrave said during an interview with Kitco Crypto. “Without users, we’ve got no adoption.”
“Streamlining the transition to web3 has always been a goal for web3 builders and developers, but 2023 marked a significant change in the industry mindset, with UI/UX dominating conversations,” he said. “From web3-native communications to blockchain-enabled gaming to simpler, safer wallets, there’s a significant focus now more than ever on making crypto more user-friendly, intuitive, and enjoyable.”
Houlgrave said that as with any application, “a seamless high-quality user experience is crucial to increasing the likelihood of users continuing to invest time into a product. While this focus on quality user experience is not limited to web3 apps, fewer barriers of entry can help make accessible a world where anybody can use cryptocurrency with the same ease of using fiat.”
“Failure to prioritize user experience will inevitably hinder the industry’s progress in achieving mass adoption,” he warned.
Interoperability is key
With the ongoing addition of new blockchain networks and layer-two (L2) protocols, improving interoperability has become a crucial factor in enhancing the user experience, and Houlgrave said companies would be wise to make it a priority moving forward.
“Interoperable wallets are not just a technological marvel; they are the key to unlocking the full potential of the diverse and ever-expanding world of cryptocurrencies,” he said. “Interoperability will be the reason why people can easily trade digital assets without having to worry about what’s happening under the hood – it’s the key to demystifying a great deal of web3 enough for the everyday individual to use it.”
“This holds particularly true for exchanges between two distinct blockchains, and even more so between chains based on the Ethereum Virtual Machine (EVM) and those not based on it,” he added. “The ability of different blockchains to have seamless communication will pave the way for an explosion of use cases and enhanced user experience, while also onboarding new users to crypto.”
“As the crypto sector continues to grow and diversify with developers innovating upon and building new chains, creating an interoperable framework allows newcomers and experienced users to interact with different blockchains in a streamlined fashion,” Houlgrave said. “Allowing users not to be locked into one platform provides them more choice, a crucial factor in a decentralized world.”
An expanding ecosystem of networks and applications
The general public’s knowledge of blockchain is limited to Bitcoin and its wild price swings, Houlgrave noted, while some that are slightly more in the know may have a cursory familiarity with Ethereum (ETH).
“Although most new users think of blockchain simply as trading crypto, web3 is a big world touching an endless variety of use cases – so much so, that many businesses working on a more traditional framework today can likely leverage decentralized technology to bring value to both their business and their customers,” he said. “The past couple of years have really set the foundations for institutional players to join the ecosystem.”
“Protocols like WalletConnect – which enables over 10 million user connections across 6,000+ apps and 500+ wallets each month – have only really become present within the space in the past 5 years or so, yet already provide a significant and dependable level of support to both businesses and users,” he added. “Where the technology prior made it incredibly difficult for businesses to connect with and reach their audiences, the lifeline provided by the WalletConnect Protocol and others has meant that the ecosystem can function with ease, enabling businesses to focus on developing their own offering and growing their community.”
Houlgrave also noted the emergence of “builder tools” that “have opened the door for institutional players to tap into the web3 opportunity.”
“Compared to even just a year ago, it’s much easier today to build in web3 – and thus, much easier to connect,” he said. “At WalletConnect, we provide full-stack builder toolkits for both apps and wallets – enabling both to tap into the WalletConnect Protocol while leveraging user-centric features that improve the user experience across their app.”
One such feature is the “Email Wallets” released by WalletConnect in March, which lets apps provide a way for users to log in without a wallet.
“Around 80 million people connect to the digital world with a wallet today, yet, over 4 billion connect with an email,” he said. “Excluding this massive market is something we really can’t afford to do as a growing industry, and so we made it possible to open up your app to them with just a single line of code that can be set up in minutes.”
“Naturally, when builders have the right tools to succeed, users do too,” he added. “For retail investors, it’s getting easier to enter web3 on a daily basis. Better technology means better connectivity, better security, better UX, better everything. Retail investors today can choose from a plethora of wallets with varied feature sets to connect relatively easily with thousands of apps.”
“And for those who may be a little too unfamiliar with the concept of connecting in web3, there’s catered options for them too, like our Email Wallet offering,” he added.
Sectors attracting attention
When asked what types of blockchain applications are receiving the most attention, Houlgrave highlighted the growth of GameFi, which is “the application of decentralized finance (DeFi) in gaming that allows players to unlock financial rewards.”
“Thanks to a compelling combination of tokenization, web3 payments, and non-fungible tokens (NFTs), there is greater room to play with in-game assets than ever before, drawing increased attention from institutional investors,” he said.
“Institutional eyes are also turning towards NFT marketplaces as they see the potential for fresh revenue channels, streamlined digital asset transactions, and imaginative ventures in sectors like art, gaming, and entertainment,” he added. “Moreover, the increasing fascination of mainstream audiences with NFTs and the surging value of digital collectibles are prompting institutions to delve into investment and collaboration prospects within this burgeoning market.”
The launch of spot BTC ETFs in the U.S. and the emergence of Ordianls and BRC20 contracts on Bitcoin have also led to a renewed interest in developing on Bitcoin, Houlgrave noted.
“With Bitcoin unprecedentedly surpassing its all-time high ahead of the highly anticipated Bitcoin-halving, it is safe to assume that the renewed investor interest will further encourage builders and developers to continue building and innovating on Bitcoin and expanding the full potential of the blockchain for investors worldwide,” he said.
“Additionally, the SEC’s approval of spot BTC ETFs was a landmark moment for the industry,” he added. “Investors now have a vehicle to gain exposure to BTC in a fully regulated environment and without having to set up a crypto wallet. The approval may also set a regulatory precedent, and lead to the approval of other crypto financial products.”
The importance of decentralization
One of the paradigm-shifting aspects of cryptocurrencies is their decentralization, which cuts out central authorities and facilitates a system where the community helps to contribute to the overall security and functioning of the ecosystem.
“In 2018, WalletConnect set out to build a protocol that would enable an emerging ecosystem of wallets and apps to connect,” Houlgrave said. “We’ve come a long way since then. Over the past 5 years, the WalletConnect Protocol has gone above and beyond in achieving what it was built to do – establishing paths of interoperability where none existed.”
“The protocol was designed to be open, federated and decentralized; however, the initial framework necessitated a closed system that could safely scale while ensuring reliability,” he said. “Now, with the proper infrastructure and architecture of the protocol in place, we are moving progressively and intently towards an open, permissionless, and decentralized network.”
Houlgrave said establishing a secure, decentralized network has become even more important in recent years amid an uptick in regulatory scrutiny of the sector.
“The current environment – rife with regulatory uncertainty, potential for censorship, and security threats – underlines the importance of decentralization and demonstrates the need for the industry to take tangible steps towards achieving this,” he said. “The benefits are clear. In terms of the user experience, higher redundancy can bring about increased reliability, reduced downtime, and improved performance.”
“A decentralized ecosystem also makes data portability possible, enabling us to ‘carry’ and plug in our data when we choose to interact with an app,” he added. “Developers can also build with greater modularity and not have to ask permission from the protocol.”
Top blockchain use cases
When asked about the best use cases for blockchain from an institutional perspective, Houlgrave said “Cross-border transactions are one of the greatest use cases of the technology.”
“In TradFi, cross-border transactions are notably cumbersome, characterized by steep fees, extended processing durations, challenges with currency conversions, and strict regulatory compliance demands,” he said. “Blockchain removes the need for a central authority in cross-border transactions, leading to decreased fees and processing durations.”
He added that blockchain is a superior way to conduct payments as it offers increased efficiency. “Crypto payments outperform cash payments across the board, offering superior speed, affordability, security, accessibility, and transparency compared to traditional cash transactions,” he said.
“The opportunities blockchain technology presents in real-world applications are endless, but one interesting and tangible use case is in decentralized social,” he said. “Data and privacy have long been problematic among traditional online social platforms.”
“Over the past two years, decentralized social protocols and products have surfaced across web3, presenting opportunities for users to own their data and digital identity, traversing with it interoperably across platforms and applications,” Houlgrave said. “Not only does this use of blockchain technology present solutions to the concerns around traditional social, but also brings an entirely new concept to digital experiences by removing the walled garden effect of siloed social platforms.”
“It’s inevitable that this new venture will pick up traction, and institutional players that leverage the growing sector will likely reap many rewards for doing so,” he said.
And with the spot BTC ETFs helping to attract greater awareness of crypto, Houlgrave said easy-to-use wallets are vital to helping usher in the next wave of on-chain hodlers.
“The BTC ETF approval certainly legitimized the asset to the wider public. Dabbling in crypto can be daunting at first, but ETFs offer an accessible entry point for numerous individuals to delve into this domain,” he said. “Wallets serve as the gateway for users to interact with the crypto space, managing their assets, executing transactions, and engaging with decentralized applications.”
“Crypto novices should start small and look at digital assets as a long-term investment, rather than making rash decisions based on market volatility,” he suggested. “BTC ETFs and centralized exchanges are a great place to start; after investors get more comfortable, they may choose to venture into the complex DeFi landscape.”
For their part, WalletConnect is “fully committed to advancing, expanding, and fostering both the WalletConnect Protocol as it evolves into a decentralized public asset, and our array of developer tools, ensuring they evolve in tandem to address the escalating needs of our industry’s innovators,” Houlgrave concluded. “With core toolkits catering to both app and wallet developers, each hosting a growing stack of user-centric features, we enable wallet and app developers to integrate diverse wallet-based functionalities, removing UX barriers and making web3 accessible, secure, and engaging for users worldwide.”
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
Register at Binance