A product is only meaningful if it serves the needs of the user. Cryptocurrency like every other product serves users and being a Web3 catalyst, many organizations are developing Consumer applications that can further increase its adoption.
Companies are creating blockchain-based applications that serve everyday use, either for you personally, for business, or just going about your life for the love of Web3. These applications are aimed at solving real-world problems. This shift is called the Crypto 2.0.
Imagine how Visa and Mastercard now support crypto payments, Avalanche launched a crypto payment card to allow people to spend their crypto assets instead of cash. Or how Telegram has hosted many play-to-earn gaming projects attracting millions of users who never thought this was possible with crypto. Retail organizations such as Adidas, Gyft, and many more allow you to use crypto to buy accessories or even book a flight.
Let’s have a look at how Crypto consumer Applications are increasing crypto adoption.
How Crypto moved from Speculation to Utility
The earlier basic idea for crypto use was primarily about trading or just making money. At the time, people bought popular cryptocurrencies like Bitcoin, Ethereum, and other tokens with the hope that the price would rise.
This era was when people treated crypto like digital gold, ignoring it as a practical tool to make life easy for users. This limited mainstream adoption as well as the real-life application of these assets.
Today, the narrative is changing from the speculative idea of crypto to utility. Businesses now accept crypto payments, stablecoins have helped to facilitate cross-border payments and blockchain-based applications are the backbone of existing and upcoming gaming platforms, social media, and finance.
This transition from crypto 1.0 to 2.0 is pushing mass adoption showing that crypto is not just for investment or trading. Here are some of the ways consumer applications are driving this mass adoption.
Consumer Applications Driving Crypto 2.0
- Crypto Payment & Financial Services
Cryptocurrency has brought about a significant change in the finance sector. The integration of crypto into traditional financial services as a means of payment has simplified payment as well as the inclusion of unbanked regions globally.
Companies such as PayPal, VISA, Mastercard, and Avalanche have created a platform that allows users and companies to seamlessly carry out transactions using their digital assets anywhere and anytime. With these platforms, users can buy, sell, or hold cryptocurrencies, while Stripe or Greyfinance offers global freelancers a global payout option.
Real-World Application
There has been an increase in the number of organizations that now accept cryptocurrency payments from users. This increase has helped to bridge the gap that exists between crypto and conventional banking, thereby making it easier for everyday crypto users. According to a report by Business Research company, the Bitcoin payment ecosystem has reached about $1.56 billion globally.
Luxury brands like Gucci and Tag Heuer allow customers to pay for goods in their stores using cryptocurrencies such as Bitcoin or Ethereum. Other platforms like Shopify allow customers and merchants to integrate payment options to make business transactions faster and easier.
2. Play-to-Earn Gaming & Web3 Entertainment
Traditional gaming has always been about enjoying yourself while gaming. But the narrative has changed as rewards and incentives were introduced into gaming.
Axie-Infinity, one of the earliest play-to-earn games was able to attract millions of players who earn tokens per game play and these tokens can be converted into real money.
Since then, other popular tap-to-earn games such as Notcoin, Blum, TapSwap, and many others have taken the world by storm, showing how you can earn from performing simple gaming tasks.
Beyond gaming, non-fungible tokens (NFTs) and metaverse have also brought a new realistic change to gaming. An era of virtual reality games where users can host events, buy virtual properties, and interact with blockchain-based digital worlds on platforms like Decentraland and The Sandbox.
3. Stablecoin & Remittances
Staablecoins like USDT (Tether) and USDC (USD Coin) have become known tokens for cross-border payments. Unlike other cryptocurrencies that face volatility, stablecoin are digital assets that retain their value and they are pegged to traditional currencies. For example $1 to 1USDT.
Real World Application
USDT offers Countries with unstable economies a lifeline. For instance, Nigeria, Argentina, and El Salvador have increasingly adopted stablecoin, which is used among citizens to protect their money against inflation and also to send money abroad without having to pay banking high transaction fees.
4. Decentralized Social Media and Content Monetization
Conventional social media networks rely heavily on advertising and monetization, often affecting user privacy. However, Friend tech, Lens Protocol, and Farcaster are shifting away from this model by enabling users to earn money from their content on the blockchain.
Real World Application
Friend.tech, for instance, lets influencers sell “shares” for their content, providing fans with access to private conversations and content. This model ensures that influencers earn income directly from their fans instead of relying on advertisers and brands. The same applies to Lens Protocol and content creators who can control and capitalize on their social media without a middleman.
5. Tokenized Real World Assets (RWAs)
The tokenization of real-world assets (RWAs) is perhaps the most exciting development in the growing adoption of crypto technology. People with access to blockchain technology can now own fractional shares of real estate, stocks, and even luxury goods.
Real World Application
Blackrock has launched a tokenized fund that enables investors to buy shares on a blockchain. Sourcing funds is now easier for the average person as individuals now do not need to have large amounts of capital set aside in order to own portions of assets that have high value.
Challenges to Mass Adoption
Even with the rapid adoption of new cryptocurrency applications, there are still significant barriers to usage by the general public.
- Resistance from Authorities and Uncertainty in Regulations
Different countries across the globe are taking a stand on managing cryptocurrency. Where some countries such as El Salvador have taken a bold step forward by accepting Bitcoin as a form of legal payment, China has opted for a ban instead.
In the United States, the legal tussles with the SEC regarding the regulations on crypto have been constantly changing, which adds concern for investors and other companies. Adoption will always be patchy without some form of regulation.
- Usability Challenges (UX) In Crypto Applications
Among the barriers that affect the adoption of cryptocurrency have been problems in its use. Most users do not understand the gas fee, weakly protected private vaults, and how to set up wallets. In order for cryptocurrencies to be widely accepted, there needs to be a better user experience.
- Erosion of Trust Due to Scam and Security Concerns.
Crypto has many cons, ranging from scams to frauds. A striking example is the collapse of the FTX and many more crypto exchanges to date. Trust towards crypto is low, even though blockchain technology is relatively stronger than others. The industry needs to enact measures to increase the level of security for consumers.
Future of Crypto Consumer Adoption
New technologies, more institutions getting involved, and better access will be the three driving factors of the next adoption of crypto. These are some trends of the Crypto 2.0:
- Integration of AI into Crypto – From automating smart contracts to trading automation, blockchain applications are getting enhanced through AI. AI-powered DeFi tools will enable users to make informed decisions and use decentralized finance which in turn makes it decentralized.
- Evolution of DeFi – Traditional finance institutions adopting DeFi protocols are making its usage much more user-friendly. DeFi becomes a viable option to establish banks with tokenized stocks, lending platforms, and automated investment strategies.
- Adoption by Institutions – The introduction of crypto-based products by big firms like BlackRock, JPMorgan, and Fidelity is giving credibility to the market. It will gradually transform the finance sector as the institutions start investing in Bitcoin ETF and tokenized assets.
Conclusion
With the help of consumer applications, the crypto world is now more accessible than ever. If technology is made a part of daily transactions, finance, and even entertainment, the scope of blockchain is endless.
For AI, DeFi, and newer institutions adopting blockchain, the era of Crypto 2.0 is imminent; however, security, regulation, and usability need to be prioritized, otherwise, the industry will fall victim to its full potential.
Once the concerns are addressed, the chances of crypto becoming a standard method of payment alongside credit cards and online banking become a reality.
Read also: Metaverse & Commerce: Is Virtual Shopping the Future
