The Potential of Cryptocurrency to Transform User Experience on the Internet

For the first time in the cryptocurrency space, there is a definitive route to reaching hundreds of millions of monthly active users.

This growth won’t be driven by traditional crypto ideologies like “democratizing finance” or “decentralization.”

Rather, it will be propelled by a crypto user experience (UX) that is exponentially better than what web2 currently provides.

The current web2 UX is, in reality, quite subpar—we’ve just grown accustomed to its inefficiencies. We manage numerous financial app accounts, endure delays for bank transfers, deal with email confirmation codes, rebuild our social connections on each new app, and generally slog through a cumbersome online experience.

It’s as if we’re relying on a taxi dispatcher, hoping the taxi arrives, and then awkwardly paying in traffic. Soon, we’ll transition to simply tapping a button on our phones. The emerging crypto tools are making the Internet so much more user-friendly that people will start demanding this new level of UX from their apps, even if they aren’t aware that crypto technology is powering it.

The almost immediate, low-gas fee Layer 2 solutions represent a clear advancement. However, there are four additional innovations that will propel us beyond the “better than web2” threshold:

Passkeys

Passkeys eliminate the need to remember passwords or private keys, making them immune to theft and negating the need for manual entry. They are easy to create, securely stored on your devices and in cloud backups, and can be easily retrieved to sign messages or transactions using your device’s PIN or biometrics. Major companies like Amazon, Google, LinkedIn, Shopify, and Uber already support passkeys.

Web Wallets

Web wallets, or “cross-app embedded wallets,” a term coined by the Capsule team, do not require a mobile app or browser extension. They align with user expectations of seamless single sign-on (SSO) experiences, unlike the cumbersome “Connect Wallet” flow in today’s crypto landscape. Enabled by passkeys, these wallets require no sign-in with Google, Apple, or Twitter, allowing users to carry their identity across the Internet, unlike current embedded wallets.

Smart Contract Accounts

Smart contract accounts and paymasters will abstract away gas fees, bundle multistep transactions into one, and make account recovery more user-friendly. Users can grant specific apps very constrained permissions (“session keys”) to transact on their behalf, similar to how some apps can tweet for them, enabling one-click transactions without confirmation pop-ups.

Open Social Graphs

New social protocols like Farcaster are creating decentralized social graphs tied to users’ on-chain addresses, fulfilling the original promise of social apps. Any app aware of your address can immediately provide a personalized and social experience upon sign-up.

The New UX Standard

There will be no more 24-word backup phrases, wallet app downloads, or broken WalletConnect flows. Users won’t need to input six-digit codes sent via email or guess multiple passwords for their Google account. Instead, they will simply confirm using a passkey, making it even easier than today’s standard SSO flow.

Upon entry, apps will immediately personalize the experience by pulling in on-chain history and social graphs. Users won’t be pushed to share their contacts; their friends will already be there.

Funds will be instantly accessible via web wallets, eliminating the need for ACH transfer waits, credit card transcriptions, or copying and pasting new app-specific addresses. Users can go from having no account on Bracket.Game to bet on the same sports teams as their friends in just 30 seconds, drastically improving visit-to-activation rates.

Crypto triumphs by enhancing Internet usability, compelling every web2 app to adapt. Finally, there will be a clear and rational answer to “why build this on crypto?”

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