How crypto can reach the next one billion users | Opinion

Most crypto entrepreneurs love to brag. They’ll tell you their blockchain, protocol, or app will onboard the next one billion users—and finally make digital assets a mainstream and indispensable part of our day-to-day spending.

But scratch beneath the surface, and you’ll quickly realize this is a load of hot air. Why? Because many of these projects suffer from the same issues that have prevented widespread adoption for the past decade: a chronic lack of usability.

Around 0.4% of all crypto users claimed their domain using Unstoppable Domains over the last few years. It’s not because of lack of demand but because of poor user experience and lack of security, where anyone can trivially look up the user’s balance and transactions just by knowing their name. It appears that neither Unstoppable Domains nor friend.tech or Mastercard Crypto Credential hit the mainstream because of a fundamental lack of privacy.

Poll after poll after poll tells us why everyday consumers are reluctant to give crypto a try. Bombarded with headlines about multimillion-dollar hacks and bad actors, they openly wonder whether businesses in this space are up to the job of protecting their cash. While many payments to merchants and loved ones are free for the public in the world of traditional finance, the prospect of forking out several dollars to cover transaction fees is very off-putting. Why make the switch to new technology that’ll actually cost you money?

That brings us to the endless jargon that curious prospective customers are bombarded with when they visit a crypto website. From talk of zk-SNARKs to liquidity pools and from degens to DAOs, too many platforms make things way too complicated. It’s little wonder that beginners feel everything is written in a second language that’s impossible to understand.

All of this then feeds through into usability. Web2 users are accustomed to getting what they want done in a couple of clicks without needing a PhD in coding to know how things work. Even those who regard themselves as tech-savvy often find web3 platforms painfully complex to use, meaning crucial first impressions are blown because newcomers give up in frustration.

When you bundle all of this together, crypto’s challenges become crystal clear: complexities in how blockchains have been designed detract from the powerful benefits they offer with decentralization, censorship resistance, and financial inclusion. One big hurdle in the way of tackling all the hurdles we’ve mentioned is alphanumeric addresses.

Addressing the issue

Bitcoin addresses are 34 alphanumeric characters—a random bunch of letters and numbers that are both impossible to memorize and prone to mishaps. To illustrate what I mean, back in 2014, a group of 75 people in a study asked to learn a series of alphanumeric strings—varying in length from just six to 14 characters. Researchers found that, as the length of a string increased, so did the number of errors identified when participants were asked to type them out unprompted. The most common mistakes included incorrectly capitalizing letters, missing characters entirely, and typing them in the wrong order.

Now ask yourself this: if mistakes can creep in when trying to type just eight alphanumeric characters, what will happen when the string is four times longer?

Missing a single character can have disastrous ramifications when a crypto payment is being made. In all cases, if the wallet accepts the bad address, funds are lost forever.  Double-checking an address and scouring for mistakes is also easier said than done, with a slew of letters and numbers blending together into one decipherable bunch. This is why savvy crypto typically sends their crypto addresses via an encrypted chat to the sending party, and then they request the sender to send a test transaction for a small amount just in case the sender gets the address wrong. Once the test transaction goes through, the rest of the funds can presumably flow to the same address.  You must send an encrypted message with the correct recipient address in the smoothest instance of the proper process. The sender sends a test, the recipient confirms it, and then the sender sends the main amount. The address also has to be correct for the crypto being sent. Ethereum (ETH) addresses don’t work for Bitcoin (BTC) payments (again, total loss if you get this wrong).

The answer to all of this is simple yet staggeringly underutilized. Crypto users should be able to send to a human-readable name instead of a jumble of digits and characters. That name should also not reveal to the world how much money the owner of the name has. The user should be able to simply post their name anywhere, like a PayPal, Zelle, Venmo ID/QR code, and receive any crypto funds on any chain without hackers being able to divine how much funds were received. Crypto will never reach the same level of adoption as TradFi until it implements the privacy consumers are used to and, ideally, does everything TradFi does, only better.  Human-readable addresses can be thought of as the new digital real estate of web3. Just as owning property grants you an address, those names can carry real utility, unlike NFTs, empowering users with a unique identifier for seamless crypto transactions, digital assets ownership, and SSI.

On the security front, uncovering address poisoning scams, where malicious actors deceive unsuspecting users, could instantly become easier. Here, cybercriminals often generate alphanumeric wallets that are nearly identical to the addresses a victim has transacted with in the past—deceiving them into sending funds to an unintended destination.

This solution would also not need to rely on any Personally Identifiable Data (PID) to function and receive addresses computation, making it completely decentralized and, therefore, minimizing security risks. 

Human-readable addresses would also have a huge impact on ease of use, enabling consumers to enjoy the perks of digital assets without any of the fuss. Growing interest would, in turn, create a network effect as more and more users start to make transactions.

A good start—but what next?

The crypto industry may not wish to admit this, but human-readable addresses would only be the first step on a long roadmap to achieving mass adoption.

Account abstraction has been touted as a huge breakthrough in simplifying blockchains, as they enable funds to be managed through smart contracts. While this can offer greater customization to some extent—and move some of the technical processes behind the scenes—it remains complicated to implement and prone to security vulnerabilities, with the prospect of additional costs for end users.

That’s not the only headache that needs to be addressed. As of now, account abstraction only exists on Ethereum when many crypto enthusiasts make use of a constellation of other networks. Fragmentation between blockchains is getting worse—and because most wallets are built for specific ecosystems, they’re unable to communicate with one another. This gives users little choice but to rely on even harder-to-use bridges if they want to move wealth around.

Other vital steps that need to be taken with security include the implementation of multi-party computation and hardware security modules—vital safeguards that add another layer of protection for user funds in custody, all while making it prohibitively difficult for hackers to strike.

The future can—and should—be bright for digital assets. However, for blockchains, web3, and crypto platforms to achieve greatness, developers need to be brave, head back to the drawing board, and look at the user experience through the eyes of beginners who have never owned a single token. Then, and only then, can any claim of being able to onboard the next one billion users be taken seriously.