TCG Crypto

On the post-wallet economy - or why the next crop of users coming to Web3, may not know what seed phrases are. A few months back while trying to sign up for a web3 native social network, I realised I could use @usecapsule to sign into the product. Curious, I dug around on how it works. Earlier today, i shipped an article on why it matters and what it means for products. Put simply, Capsule allows users to authenticate transactions via the Secure Enclave on your devices. Things like your fingerprint or facial scans could be used to sign a transaction. It works using passkeys. Passkeys are a mechanism of separating private and public keys for authentication. You have likely used it on google, Binance or Amazon already. Part of the reason so many large organisations adopted it is FIDO - an alliance that has onboarded 250 organisations towards the standard. In other words, it’s secure tech from the traditional world. Why does this matter to Web3? If you were a user in crypto in 2019, your best bet at minting an NFT involved - setting up a wallet, storing the key, signing up for an exchange, wiring it money, withdrawing the asset, and then minting it. All of it would have taken days. SDKs, like the one provided by Capsule reduces that whole process to under 5 minutes. Historically, embedded wallets used to be app-specific. That is, if you signed up for a product with wallet ABC - and then did the same thing on another product, you would have two separate wallets. Metamask’s core proposition was portable assets (and identity). SDKs like the ones provided by Capsule bridges that gap. You can now spin a wallet linked to a Web2 form of identity (like your X handle, gmail or Discord) and use it across products. Think of it as “sign in with Gmail” - but for your wallet. What it lets products do is have the ability to blend web2 products with Web3 primitives. Capsule, for instance lets you pre-generate a wallet. So realistically, you can target the top 1000 handles on Twitter for a niche (like fitness) and pre-load it with NFTs that can be redeemed for access to a club or discounts to an event. Or you could use data from Reddit’s API to give points to a userbase, which can then be used on a DAO. In fact, this is what @rdatadao did recently on Commonwealth. These bits may not seem overly exciting for a userbase that holds on to a cold-storage wallet. But if we are to scale users, then this is what it will take. Easier on-ramps with wallets that don’t take 15 minutes to set-up. Think about Web3 native games spinning wallets and pre-loading it with assets at the click of a button. For scale - Metamask had 30 million users (as of Feb 2024). Gmail’s userbase is at 1.8 billion. Better wallet infrastructure is the key to scaling user bases beyond the echochambers of CT. For developers building here and today - the difference between being stuck with token games, and building viable products with meaningful revenue will boil down to betting on infrastructure providers that are looking towards the next billion. Naturally, for providers (like Capsule) - the challenge is in balancing the needs of users (of convenience and speed) with fundamental needs of security, censorship resistance and self-custody. Read more about how it works, in the link below.