Discussions about accelerating cryptocurrency adoption often focus on improving the user experience. (UX). The popular thinking is this: Web3 products lag behind from a user experience perspective, onboarding poses multiple friction points, and technology concepts come with learning curves. Web3 is missing a seamless app experience that will unlock greater adoption.
While improving the UX of cryptocurrencies is certainly important, I believe the most important and urgent barrier to adoption is build things that people want. Web3 has a product-market fit problem, not a UX problem.
Li Jin is a co-founder of Variant, which co-edited this article.
Product-market fit occurs when a product satisfies a strong market need. For consumer builders, the beauty and challenge of building for consumers is that humans have remarkably consistent needs over time. That's why Maslow's hierarchy of needs continues to resonate almost a century after its introduction, with universal needs ranging from physiological (food, shelter, clothing) to psychological (belonging, love, entertainment, esteem).
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The story of consumer startups is one of continuous innovation to solve human needs in novel ways. While people often dismiss new consumer apps as incremental innovations in frivolous categories (“teenagers making dance videos”), the truth is that successful startups offer incremental improvement to enable people to satisfy a core need. Amazon sold us books (and everything else) with just a few clicks, making the process of purchasing goods drastically easier. Facebook allowed us to connect with those we care about instantly. Tinder exposed us to an order of magnitude more potential romantic partners than anyone could find in real life.
There is plenty of evidence that when the user benefit is great enough, users are willing to overcome UX obstacles and learn new behaviors, in crypto and more. Examples include the first iPhone (which lacked a touch keyboard), the Internet itself, and all cryptoassets and applications that have seen significant adoption to date (non-fungible tokens or non-fungible tokens). NFTs, during the last bull market is a prime example). For products that solve a core need, the complicated and unfamiliar user experience has not been an obstacle.
Despite the long list of multifaceted user needs, until now, exploration of the opportunities that cryptocurrencies can uniquely address have largely been limited to the financial realm. While income is a widespread need, products whose income is derived from speculation work when the market rises, but lose their appeal when prices fall. It's a tough sell, especially when there are alternatives for users to earn income with less risk and uncertainty.
There is an opportunity for cryptocurrency creators to create products that better address other human needs, such as belonging, community, and entertainment. What could that look like?
On a small scale, NFT communities and decentralized autonomous organizations (DAOs) have satisfied some people's need to belong, forging novel social graphs based on asset ownership. For those who say that shared financial interest cannot be the basis of “real” relationships, consider that many of our real-world connections are based on property, whether they are neighboring homeowners, startup employees, or card collectors. Pokemon.
For products that solve a core need, the complicated and unknown user experience has not been an obstacle
There is an opportunity to leverage on-chain assets as a foundation for new communities that resolve belonging, esteem, and connection. In August 2023 alone, 94.5 million NFTs were minted on Ethereum and its layer 2 scalability protocols; As the volume of user activities grows, imagine inferring user interests based on chain actions and exposing connections based on a rich history of activities.
Onchain media expands our entertainment options, giving us skin in the game of what we consume and create online. On platforms like Sound.xyz, friend.tech and Zora, users can bet on the media and creators they believe in, improving their content experience and turning these networks into financialized games. In a world where all media are started as NFTThere will be a new economic dimension that can enrich our Internet experience.
These are just starting points for what it might look like for cryptocurrencies to find product-market fit and address needs beyond revenue. There is room for much more experimentation from here. To achieve widespread adoption and evolve beyond their current niche, crypto products must improve the human experience through solutions that would not be possible without cryptocurrencies.
