tl;dr: As we saw with the consumer adoption of the Internet, creating simple “on ramps” to allow more people to access services is a key driver of growth. The good news for crypto is that everyone knows this and is doing something about it.
Back before the Internet was the INTERNET and everyone knew what it was, one of the commonly used terms was “the Information Superhighway.”
It was a powerful visual. It made the concept more accessible to millions of people who did not have any interest or need in understanding how packets moved across networks using the TCP/IP protocol.
Early on, however, accessing the information superhighway was not easy.
Until the late 1980s and early 1990s, you pretty much had to work at a university or research institution. Even then, use was not widespread. I was fortunate to be an undergrad during this time. It was revolutionary to have Internet access in my dorm room. Most people went to the computer lab.
In fact, during my summer abroad in Germany in 1994, the computer lab was the ONLY place that students could get access to the Net.
Around that time, services like Prodigy, Genie, and Compuserve began to emerge providing the consumer “on ramps” to the Information Superhighway. Later, of course, the “mack daddy” of all of these, AOL with its omnipresent CD’s and the iconic “you’ve got mail” notification increased the demand for access to the highway.
The development and improvement of these “on ramps” led to the buildout of data networks bringing ISDN lines and eventually gigabit fiber to homes and businesses everywhere.
Which brings us to crypto.
I sometimes tell people that crypto is in the “56k dial-up modem phase.”
Recently, I was playing around with some of the emerging technology for decentralized applications from projects like Blockstack (more here), Compound, and EOS.
I built a webpage, played a dice game in a virtual casino, wrote a blog post on a word processor, opened up a collateralized debt position, put some crypto into a bond that pays 3.37% APR, and made an entry on a decentralized version of Wikipedia.
The good news is that these applications work.
You’ll be happy to know that I made some money at the virtual casino (and yes, I’ll declare the $5 in winnings to the IRS).
You can see the VERY rudimentary webpage here.
Something like this is potentially very powerful and useful in places like Venezuela or China. Imagine a page where a dissident can report on the government and there is no way that the site can be censored.
The bad news for all of these applications is that it is exceedingly challenging to get started.
The set-up time just to engage with any of these applications is way too lengthy. On top of that, you have the challenge of keeping private keys safe, not losing them ever, and using somewhat unintuitive software. It is full of friction, hurdles, and frustration. And remember, I have been in crypto for 3 years.
There is good news.
That is the fact that pretty much everyone in crypto realizes the size of the challenge. Without overcoming it, mainstream adoption will not meaningfully occur. The even better news is that there are a large number of projects working on solving it.
At least 2 or 3 times per week, I become aware of a new project that is seeking to reduce the hassles associated with obtaining crypto so that non-technical users can begin to explore this vast and exciting space.
Simultaneously, they are trying to eliminate the burden of 100% total self-sovereignty, which is a fancy way of saying “you control your private keys 100%.”
For many people, this is a feature. For many others, however, this is a barrier.
Many people WANT the proverbial 800 number to call or Customer Service to contact. Providing that type of backstop, while being decentralized-that no one else can ever take control of your account- is top of mind to wallet developers.
Wallets are the crypto “on ramps.”
The first generation Web3 wallets, where the standard is MetaMask, were great to make it possible for the enthusiasts and early adopters to use decentralized applications. However, they are far too cumbersome for more mainstream users.
The next generation of wallets, with ‘smart contract wallets’ being the primary type, are coming onto the scene.
GnosisSafe is one of the earliest ones, but there are others out there and some really neat ones coming out soon.
If MetaMask was like the computer lab, these next wallets are like CompuServe and Prodigy…possibly AOL.
As the on ramps to the “crypto highway” (or whatever it gets called) get paved, it will become increasingly easier for more and more people to experience these decentralized applications.
When they do, they will discover solutions to problems (e.g. censorship-resistant reporting from within totalitarian societies) as well as create entirely new uses that were previously unimaginable.
Some people remember the “handshake” sound of the computer calling AOL and connecting to the service. It was slow and challenging. At that time, no one foresaw Netflix delivering the entire library of West Wing episodes on demand 24/7. Yet, here we are.
Today, it is not the sound of the modem connecting to AOL that is indication of the barrier, it is passwords, key management, and getting crypto in your wallet.
Tomorrow, though, those barriers just like sound of the modem, will be ancient history. We’ll all be using crypto and blockchains without even thinking about it.
We’re in the 56k Dial-Up Days of Blockchain. The On Ramps are Coming was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.