If you are brave enough to explore the depths of “CT” (Crypto Twitter), which is still the best place to get information on cryptocurrency, blockchains, and NFTs, you will see a lot of bullish talk about cryptocurrency being ready to supplant fiat currency as the best way to send money around the world. Indeed, you’ll often see videos showcasing how easy it is to, say, pay for a coffee in El Salvador (arguably the world’s most crypto-friendly nation) with Bitcoin. There is some truth to the argument, of course. However, it can ring a little hollow at times when we are told that paying with crypto is easier than with traditional payment methods.
Overall, web3 – the broad term for the next generation of the internet powered by crypto and blockchains – has a user experience (UX) problem. We are often told, “all you have to do is connect a wallet”, but we know that it’s not always the case in practice. Last year, CoinDesk ran a feature talking about why crypto payments haven’t yet taken off. At its center was the admission that paying with crypto is not yet “tap to pay”, which you can do with almost any other payment method. Consumers like convenience, and crypto is not there yet. Worse still, the experience can be confusing and unreliable.
Cards and eWallets still dominate online payments
A good example is the online casino sector. Sure, we know that there are crypto casinos out there, some of which have become relatively popular. But it is still relatively niche. The vast majority of the big casino operators do not accept cryptocurrency. Sometimes that’s down to regulation in certain jurisdictions, but it’s also down to the fact most players are comfortable depositing at a casino with Trustly, PayPal, or more traditional methods like credit cards. All of the previously mentioned options are free, and the games on the casino sites use fiat currency as the denomination, so it’s difficult to make an argument as to why you should connect a crypto wallet in the first place.
Of course, in saying that, there are benefits to using crypto wallets. Indeed, the point of this article is not to denigrate crypto; rather, our goal is to point out that there is a disparity in the argument that crypto should replace fiat because it is easier to send and receive. You could use PayPal right now to send a friend $100, and you will be certain that it’s going to arrive instantly in their account without any fees. If you have used a crypto wallet before, you will be well aware that it is not always guaranteed to arrive instantly, and there are always going to be network and gas fees.
Crypto will one day rule supreme
Still, the peer-to-peer nature of crypto transactions is something to celebrate. We mentioned the example of sending a few bucks to a friend via PayPal there, but if you have ever tried to, say, pay a business in Nigeria when located in the United States, or vice versa? It’s slow and cumbersome, and there are several intermediaries ready to take a cut. If you have the time, research how the process of sending an international bank transfer – the methods used are incredibly outdated. Crypto fixes this, but it must become a little easier in terms of UX.
It’s worth saying that it’s our view that crypto will one day replace fiat as the primary means of transacting value. But it’s much too early to celebrate that as a done deal. Crypto promises secure, peer-to-peer transactions, at fractions of the cost of sending fiat (for merchants and buyers). But the web3 sector must find a way to make it seamless. At the moment, it’s far from being that.