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Hackernoon logoToday’s Big Problem with Cryptocurrency Adoption by@kennymuli

Today’s Big Problem with Cryptocurrency Adoption

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@kennymuliKenny Li

Investment Analyst @ SenseTime. Founder of Worthyt. MIT Sloan 2020.

Sweaty palms and buying your first bitcoin go hand-in-hand.

Hey, What’s Your Wallet Address?

I’m fairly confident in asserting that Satoshi Nakamoto did not conduct enough user experience testing prior to launching Bitcoin. He/she/they certainly didn’t show up for all of the Drunk User Testing events. But the result from a lack of user experience highlights a major impediment in the form of one word when it comes to cryptocurrency adoption: intimidation.

Most of us can’t regurgitate the first 5 decimals of pi (or maybe I’m just speaking for myself) let alone a random combination of 26–35 alphanumeric characters in response to, “Hey what’s your wallet address?”

TFW people ask for your wallet address

I don’t know what most of you do, but when someone asks me for my wallet address, I usually have to go digging it up. Considering that most Internet users can’t even stomach a page load time of more than three seconds, getting someone to dance a 10-second dance is about as hard as it sounds. Yes, there are solutions to these problems and more including things like the Ethereum Name Service but the process to getting a human-readable address can be quite daunting for the average user as well.

A Victim of Circumstance

My article certainly isn’t an opportunity for me to point fingers. Cryptocurrency has been a target of financial institutions for a while: Square shut down its Bitcoin payments and no longer works with merchants that deal with cryptocurrency in any form; credit card companies are charging egregious fees or altogether blocking cryptocurrency purchases; and some banks are blocking any transactions that are related to the purchase of cryptocurrency.

Furthermore, the overall progress of various technologies in the industry still bucket cryptocurrency as a high-risk beta product. Attacks that used to only work in theory are in practice today, and millions of dollars worth of cryptocurrency disappears in the blink of an eye. Problems with keeping up with the increasing number of users (referred to as scaling issues) and activity going on simultaneously has led to poor and unreliable transaction speeds.

As the financial world attempts to pin cryptocurrency into a corner and cryptocurrencies start bumping into technological barriers, the options for a great user experience dwindles. Alternative cryptocurrencies (i.e., Altcoins-cryptocurrencies that aren’t Bitcoin) are left for purchase only through exchanges; the lucky ones appear in popular exchanges like Binance, while smaller, less fortunate ones find their way into the abyss; in either case, they are hard to obtain by anyone not very comfortable with cryptocurrency transacting. As a result, sometimes obtaining altcoins can feel as sketchy as buying guns, drugs, or murder on the dark web. I shuddered just typing that.

With the majority of altcoins, which are primarily used for playing with different blockchain apps, tucked away in an unobtainable place for the majority of users, it’s no wonder why people today aren’t using blockchain apps as much as we all envisioned. Adoption won’t drive itself; without a popular use case, cryptocurrency’s value will continue to be misunderstood by the Internet.

Decentralized Apps Today

What Crypto Adoption Looks Like vs. What We Think Crypto Adoption Like

Cryptocurrency volatility isn’t just about price anymore. As one of the most popular applications to come out of the blockchain space, Cryptokitties’ recent plummet in transactions activity by 98% begs the question: is it the future, or is it just hype?

Even as a cryptocurrency enthusiast, I admit, I just couldn’t get into it. I wanted to, I really did. But most of my Ethereum is stowed away in an address housed on my Nano Ledger, which is cumbersome to locate, plug in, unlock, and transfer over to a Metamask-hosted address. Then the time to wait for the transaction verification on the blockchain, the gas fees involved, the possibility of phishing attacks and private key exposure… I never got into it. But this isn’t a knock at Cryptokitties; it is certainly one of the best consumer apps to come out on the blockchain.

If you’re not experienced with cryptocurrency, the previous paragraph probably made no sense to you. And that’s okay, because it again emphasizes the huge barrier to entry that stems from an intimidating user experience.

And you’re not alone; in fact, while projects are launched on the blockchain every day (a majority of them on the Ethereum blockchain for now), obtaining and maintaining active users is a daunting task. With so much speculation on the markets (especially with the recent bear market), the majority of cryptocurrency holders are more comfortable holding or trading their coins for monetary purposes than using them for practical ones (queue the big debate: are most tokens are security or utility?). As a prime example, take a look at the Top 5 Ethereum decentralized apps: four of them are apps that foster the transaction of Ethereum tokens, aka exchanges, and the other is Cryptokitties.

So What’s the Solution?

I’m going to say it, and many blockchain fans will hate me:

In today’s world, cryptocurrency needs more traditional apps as a bridge to the decentralized world.

Because there is a larger segment of the population that isn’t ready to put responsibility entirely into their own hands. We’ve grown up in a world where we can easily restore access to our accounts with a simple click of Forgot My Password and fraudulent transactions can be disputed with a call to a bank’s support line. Blending the conveniences offered through traditional apps with certain features of a decentralized world creates a bridge between the two. No more swimming to the other side cold turkey.

Blending the conveniences offered through traditional apps with certain features of a decentralized world creates a bridge between the two.

In this respect, crypto apps are built with users in mind, not tokens. I’ve spoken to many blockchain startups that can’t accept a reality where they can build a perfectly fine product without the need to introduce their own token. Why? Usually, it’s because a token is needed to conduct an ICO, which is the way the majority of companies raise money in the blockchain space. I don’t see this is a legitimate reason to create a new token.

This is a question we asked ourselves when building out Worthyt.

Shameless plug about my project, Worthyt: we’re want to support content all over the Internet by letting users send as little as 10 cents as appreciation for YouTube videos, tweets, reddit posts, Wikipedia articles, or other content that they enjoyed. This money goes towards supporting both the content creators and the platform (e.g., the YouTuber and YouTube). If you want to try it out, you can download the Chrome extension here:

Anyway, as one of our goals, we also wanted to encourage cryptocurrency adoption. As a result, we decided against an ICO, because getting the average Internet user to figure out how to obtain our coin would be, in our opinion, an adoption killer. Instead, we allow users to send in Bitcoin, Ethereum, Litecoin, or Bitcoin Cash; once users receive these major cryptocurrencies that have value, it’s a much larger incentive for someone to learn about it, because then they have a reason.

Our decision, of course, should not be assumed as an umbrella approach; certainly, decentralized applications serve particular use cases very well. For those willing to take full responsibility for securing their assets and able to learn about the best practices for doing so, a decentralized application offers programmatic features that are unobtainable to a guaranteed degree in traditional apps, such as privacy and a level of control that just can’t be obtained through traditional apps.

But the road to cryptocurrency adoption begins with easy and comfortable user experiences. With the recent market crash in price and overall drain in market cap, now is a more sensitive time than ever to focus on adoption, as it presents an opportunity to showcase the value of cryptocurrency beyond its get-rich-quick pricing claims.

One benefit of cryptocurrency that we are showcasing at Worthyt is the lower fees in comparison to fiat for microtransactions. For each appreciation sent in fiat, 75% goes to the content creator, 10% goes to the platform (e.g., if someone sends Appreciation for a Reddit post, then the platform would be Reddit), 5% goes to powering Worthyt and the remaining 5–10% goes to fiat processing fees. By contrast, with cryptocurrency, 90% of each Appreciation goes to the content creator, 5% goes to the platform, and 5% goes to powering Worthyt because any associated fees aren’t handled by us. In other words, by using cryptocurrency, more funds can go towards supporting content.

Nonetheless, there are many efforts that are underway — projects that take a traditional app approach in combination with exposure to cryptocurrency, and these apps are certainly an asset for the adoption of cryptocurrency. Eventually, decentralized apps have the opportunity to take up a much bigger portion of app consumption by everyday consumers, but we need to show people how to walk before they can run.

If you enjoyed this article and want to support me, support my project by checking out Worthyt! We’re in beta so we’re all ears for feedback.


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