The Digital Evolution of Money. Exploring Digital Wallets: The Gateway to Mainstream Adoption
October 9, 2023
One of the greatest hurdles for mainstream adoption of blockchain technology is firmly rooted in user experience and user interface. For those who are familiar with DeFi (decentralized finance), dApps (decentralized applications), and blockchain wallets, you no doubt have memories about the learning curve you experienced when first attempting to use this technology.
Traditional finance (banks, central banks, loan providers, government agencies, etc.) holds a significant advantage over blockchain technology. It is a legacy system, and as such, it does not need to convince people to use the products and services of that system. People are forced to participate in traditional finance in order to function in our society – we are born into it. You need a bank account, tax identification number, and a healthy credit score if you are going to store your money/income, pay your taxes, and purchase a house, car, or any other item that might require financing.
Blockchain and the emergence of DeFi offers an opportunity to disrupt the legacy systems of traditional finance and empower financial independence for all. Traditional finance is riddled with gatekeepers who decide how, where, and when you can use the money you store in a bank account. There can be limits on transactions and/or special requirements for access to investment opportunities. You are probably unaware of it, but you do not have full control over your money and how you can use it.
DeFi creates an opportunity for people to participate in a financial system without gatekeepers or third-party intermediaries. Smart contracts and dApps allow anyone to borrow and lend money with ease (assuming the protocols have been vetted). All they need is a blockchain wallet.
The industry has not yet achieved a high level of interoperability, so depending on the blockchain(s) you use, you may have several different interfaces. These interfaces are blockchain wallets, and they are the gateway to unlocking how you use your money in DeFi. For those of you who are new to cryptocurrency, you can view a blockchain wallet as a bank account, except that you are the sole custodian of that wallet. If you follow basic security practices, no other entity can gain access to your wallet on the blockchain.
The future adoption of blockchain and DeFi rests squarely in user experience and interface. Blockchain wallets need to be easy to use and offer cross chain interoperability. If there is to be any future for mainstream adoption of this technology, that needs to be a priority. Otherwise, the average citizen who does not understand this technology will be hesitant to use blockchain. It is probably a safe bet that the average person does not understand how a debit card (or maybe even the internet) works, but it requires very little effort for them to adopt and use this technology.
Developers need to find creative ways to link blockchain wallets with traditional finance systems, so that they can more easily onboard people from legacy systems. If it is easy to set up and use, and offers better products and tools, people will probably not care whether they are using blockchain or not. Simplicity and ease of use are enough to satisfy the criteria for the instant gratification that dominates consumer behavior in the world. So, how do we build this future?
As an open source and fairly launched blockchain, Ergo is uniquely positioned via its technology, and the Ergo Manifesto, to address the shortcomings in worldwide financial inequity. The non-profit Ergo Foundation hosts regular hackathons that encourage the development of tools and products that seek to make blockchain technology easy to use, secure, and transparent. With the next ErgoHack just around the corner, the Ergo Foundation is encouraging developers to consider looking at wallets and mainstream adoption. The Ergo Platform has several excellent wallets, but they work solely on Ergo. Can developers find ways to bridge the Ergo blockchain to popular industry wallets, such as Trust Wallet and/or Metamask? Can new technologies be designed that further decrease the technical entry barrier so that the average citizen is more inclined to use blockchain tools?
If you are a developer who has been thinking about how to address some of these issues, then you are a prime candidate for participation in ErgoHack VII. These events have yielded some of the most widely used technology on the Ergo Platform. With the imminent release of Rosen Bridge, Ergo is positioned to lead the industry forward with secure cross chain interoperability. When technologies that increase mainstream adoption catch up to the level of development on the blockchain, we will see a new era of blockchain usage.
Join ErgoHack VII today! Submissions are open until Oct. 13, 2023, and the event will run from Oct. 13-15.