Adoption of Web3: Seed phrases will not work for 95% of traditional users

Cryptocurrency wallets with simpler login options and recoverable passwords could become the industry standard in the future.

The complexity of current Web3 wallets is one of the main issues hindering widespread adoption of cryptocurrencies.

According to Bumblefudge, the chief steward of the Chain Agnostic Standards Alliance (CASA), an autonomous organization of blockchain developers, in order to facilitate widespread adoption, the cryptocurrency industry will have to move away from the current complicated seed phrases.

He said during an opening speech at the Web3 Summit 2024 in Berlin, Germany:

Seed phrases are not going to work for the other 95% of the world. But, unfortunately, the solution to that is boring and ugly standards, governance.

The current complex process of onboarding cryptocurrencies remains intimidating for conventional users, as it requires creating a wallet with native gas tokens and unrecoverable seed phrases before being able to transact on a network.

Web3 wallets and DApps need more user-centric features

Web3 wallets need more user-centric features to attract the majority of users, and the first priority is to move away from complex seed phrases.

However, this would require a collaboration standard across the industry from wallet providers and developers, explained Bumblefudge:

Nobody wants to write how they use it because everyone is competing against each other. Everyone wants the best parts, the implementation. So nothing will be interoperable. Nothing will be secure.

Without a collaboration standard, wallet providers will not be able to create interoperable and user-friendly solutions, such as passkeys. And he added:

We have to go down to the user instead of going up from what the chain wants and what the DeFi protocol wants. We need standards for user expectations.

Wallets and cryptocurrency protocols must eliminate frictions for the first billion users Other renowned crypto companies also advocate for removing friction points.

In particular, Chintan Turakhia, senior engineering director at Coinbase, said that bringing the first billion users to the blockchain will require more beginner-friendly applications.