“Money speculation” is still the main use case of cryptocurrency, and cryptocurrency is far from becoming popular and mainstream. These realities are frustrating.

Or let’s look for some hope and try to capture the small changes that are taking place under the surface we can see in front of us.

In order to let readers better understand the development trend of mainstream adoption of cryptocurrency users, linkwind presents to you what efforts have been made by participants in the whole industry to improve the user experience, efficiently transform the growth of new users and introduce physical assets in addition to encrypted original assets in the past 2019. It is hoped that these seemingly minor changes can surge in chaos. Once they are ready to break out, they may bring hundreds of millions of new users and new markets to the cryptocurrency field.

Go to the third world

Where are the billions of users of cryptocurrency? In Africa, in Asia, in Latin America, in third world countries that lack financial instruments.

In China, the mobile payment experience covers almost all aspects of people’s clothing, food, housing and transportation. One of the reasons why this “advanced” payment method does not appear in the United States and Europe is that European and American countries have developed and highly popular credit card payment systems. In China, not everyone can handle credit cards. It is precisely because of the lack of underlying credit card system that Chinese people have urgent demand for mobile payment, and China’s mobile phone penetration rate is higher. So China Mobile has paid a premium to the European and American countries, and has emerged the family bucket payment tools such as WeChat and Alipay. You can pay by scanning QR code when you buy a dish in the vegetable market.

With the popularity of mobile payment, we can speculate that a series of encrypted payment applications such as lightning network are difficult to regard China as the main battlefield, but will first occur in areas with urgent needs.

Experts are always among the people, and practical wisdom always appears where there is the most demand. Where is the main battlefield for potential cryptocurrency users? In Africa, in Asia, in Latin America, in third world countries that lack basic financial instruments.

According to a public opinion survey conducted by the Online Statistics website statista, from the perspective of the use of cryptocurrency around the world, the top nine users of cryptocurrency are from third world countries. From the 10th, non third world countries began to be shortlisted.

How can users in the encrypted world find them

In the article “talk about decentralization”, the author asked a founder of the Web3 foundation a question when he attended the Web3 summit in Berlin: “when will so many decentralized applications, such as money and media, be accepted by the public?” the other party pondered for a long time and got the answer: “When the economy fails… The government indiscriminately issues money… Rites collapse and music break down… The people are desperate…”.

The places that are the first to be on the verge of collapse are the places with the greatest potential for early adoption needs and users. These places may be Venezuela, Iran or Turkey. In these cases of financial chaos and inflation, folk experts are always creative.

For example, in the article gift cards and BTC, a remittance system for Nigerians to send money home, blockchain media orange book introduces an interesting application case: gift cards have become a means for Nigerians working abroad to send “money” home. They will first replace the dollars earned in the United States with gift cards, Then let the family members exchange bitcoin through the gift card, and then change bitcoin into Nigeria’s local currency “naira”, so as to complete the purpose of remittance in the way of curve saving the country.

In Venezuela, where the economy is on the verge of collapse, people spend hours playing a multiplayer online game “Runescape” every day. They exchange “gold farming” for virtual gold coins, game points or trophies in the game, and then sell these items to other players to earn bitcoin to make a living, and even spread real inflation to the virtual world. Due to the instability of Venezuela’s economy, the income of these “gold miners” is more than five times the minimum wage in Venezuela.

For an ordinary Venezuelan citizen, as long as the food price does not rise to an unbearable level due to inflation, his income from playing gold in the game will barely be enough for his family.

In the article “how can a blockchain survive if the Internet is turned off?” Lianwen introduced a series of wireless communication payment solutions, one of which is called “locha mesh”, which is a little different. The difference is that it happened in Venezuela under the harsh living environment. Currency inflation made the national life of the third world a mess. Power failure is daily here. Locha mesh was born under this background. It can use mesh network to realize bitcoin trading and communication without Wi Fi, router or electricity, And they are privacy encrypted. It can be said that this is a kind of practical wisdom born under special conditions. It can also be imagined how rough this prototype will be.

Coincidentally, Jack Dorsey, CEO of social platform twitter, also believes that the future of bitcoin is in Africa. He also said that “next year he plans to move to Africa to settle down for a period of time.”.

In the native cryptocurrency project, CELO is trying to pry open the payment channel of third world countries through blockchain technology and obtain users there. CELO is an open source platform for blockchain financial applications focusing on mobile payment. Its vision is to establish an open financial system so that residents in the third world without bank accounts can easily use mobile phones to trade cryptocurrencies and enjoy convenient point-to-point lending, insurance and other financial applications, just like sending text messages.

In order to provide direct cash assistance channels for the poor in Africa, CELO cooperates with givedirectly, a charitable donation platform. Givedirectly provides free Android phones and installs wallet software for recipients who do not have smartphones in Africa. Recipients can accept donations, deposits, consumption, etc. through CELO applications installed on their phones.

This is a thought-provoking attempt. We once used CELO’s mobile payment solution at Ethereum’s hacker conference in Berlin. This solution has no app for Apple phones, only mobile applications for Android platform. CELO’s team explained that this is an application for low-income people in economically underdeveloped areas. Obviously, they can’t afford Apple phones. Such thinking is very convincing.

In addition, CELO also joined the innovation accelerator of the United Nations World Food Agency to design blockchain solutions for rescuing the hungry. Meanwhile, CELO has launched a series of small pilot projects for end users in the Philippines, Argentina, Kenya and other countries to collect data and improve user experience in different countries.

CELO has won the favor of VC in Silicon Valley. In April this year, CELO completed the financing of US $30 million led by cryptocurrency fund a16z crypto and polychain.

Obviously, the majority of third world countries, including Asia, Africa and Latin America, have strong demand for cryptocurrencies. In contrast, the actual deployment and investment in Africa and Latin America are far from keeping up. According to the research data of the block, South America and Africa account for less than 1% of the investment in the cryptocurrency industry in 2019. In absolute terms, North America, Europe and Asia account for about 99% of the investment in 2019. John dantoni of the block said, “the story that blockchain technology has been telling is to provide banking services to people in non bank areas, but South America and Africa, which need to improve financial infrastructure, account for less than 1% of the investment in 2019.” therefore, we believe that in the coming years, The vast number of third world countries will become a fertile land for the development of cryptocurrency and its financial facilities.

Get through real scenarios and use cases and introduce new high-quality assets

To really introduce users, you also need to find actual use cases other than “speculation”. At present, more attempts are being made to introduce new high-quality assets in the field of cryptocurrency to the greatest extent, especially to connect with physical assets with real use scenarios.

The decentralized financial agreement makerdao launched the multi asset mortgage Dai function MCD at the end of 2019, adding more types of collateral, which is more likely to introduce physical assets into the defi system in the future.

Chain news previously reported that maker has launched a series of pilot tests in the fields of “long collection cycle and large capital gap at all stages of operation” in conjunction with the blockchain project centrifuge, such as logistics, real estate and the creators of the streaming media platform spotify. (please refer to the article “how to get defi out of the small circle game? Take a look at its application in real industry” for more detailed cases.)

Specifically, in the pilot project carried out by the joint decentralized logistics platform dexfreight, the carrier can use the “dexfi” function on the dexfreight platform to mortgage freight bills for financing. In less than one minute, the carrier can borrow funds at a borrowing rate of less than 1%, which is usually delayed by 45 days.

In the field of real estate, centrifuge provided a US $70000 real estate mortgage loan to new silver, the initiator of us non bank loans. The maturity date of the loan is March 2020. In cooperation with futurefin, a private capital liquidity provider based on residential financing, centrifuge launched a standardized mortgage token to reduce issuance costs, data transmission and friction in services, About 35% of the cost was saved.

In addition to the traditional logistics supply chain industry, centrifuge also tries to explore some emerging digital media industries. In October 2019, at the defi summit held in London, centrifuge, together with music data analysis technology finance company paperchain and makerdao foundation, demonstrated the use of tinlake financial application to pay $60000 in advance of copyright income to an unnamed music brand on the spotify platform. The whole process took less than 30 minutes, The transaction cost is less than US $3, 45 days earlier than expected, and the interest rate is 80% lower than the current income prepayment solution. From the perspective of the whole digital media consumption industry, about US $100 billion of assets are locked in various digital media platforms around the world, which can not achieve liquidity, with an average lag of 90 days.

In addition, real estate investment platform realt launched the first real estate token fund pool on uniswap, which marks the beginning of real assets entering the defi system. At present, the property has been sold out, and the holder of its token has begun to collect rent according to his share.

Promote the growth of new users and provide new users with a simple defi access portal

After the short boom of ICO burst, defi became the most dazzling concept in the cryptocurrency world in 2019. Although the number of defi users is small, mainly geeks and Ethereum developers, the defi protocol and applications are constantly improving, bringing hope to cryptocurrency users.

At present, the decentralized financial agreement maker and its stable currency Dai are most likely to assume the important task of expanding the user base of defi.

While launching multi asset mortgage Dai function MCD, maker introduced Dai deposit interest rate (DSR), which has attracted much attention, to provide low-risk savings interest for Dai holders. For users in developed countries with low or even negative interest rates, this cryptocurrency product that can provide low-risk savings interest is of great significance, which means that it can attract more new users to buy and hold Dai and obtain interest from it, so as to expand the potential cryptocurrency user base.

The latest trend is that in order to expand the volume of Dai, users can even convert from centralized stable currency usdt to obtain Dai.

Okex, one of the world’s largest cryptocurrency exchanges, opened the recharge of stable currency Dai at the end of 2019 and put Dai trading pairs on the shelves, including BTC / Dai, ETH / Dai and usdt / Dai. Meanwhile, as a centralized exchange, okex integrates DSR (Dai deposit rate) for the first time.

Since usdt has always been the most popular stable currency in the cryptocurrency world, it also has the largest volume. When the transaction between usdt and Dai can provide sufficient liquidity, it is convenient for users to exchange usdt for Dai and earn DSR income. To a certain extent, it is equivalent to providing a simple defi access entrance for new users.

Improve user experience and focus on decentralized product improvement

One of the biggest obstacles to the large-scale adoption of cryptocurrency is the user’s entry experience. According to roham gharegozlou, CEO of dapper lab, just downloading the metamask plug-in will make the loss rate of new users as high as 99%. Today’s DAPP experience is the same as that of the Internet in 1993. At that time, there was no Netscape browser. Before surfing the Internet, users must buy TCP / IP software, and then go through a 38 step installation process.

Fortunately, the cryptocurrency user experience has improved over the past year, whether in wallets, defi applications or DAPP.

An obvious trend is the rise of one-stop platforms, especially in the field of defi. These products provide users with a one-stop seamless experience of aggregating multiple defi services to facilitate users’ one-stop management of assets and data. The rapidly developing products or platforms include frontier wallet, instadapp, ramp instant, zerion, defi Saver, imtoken and Wyre.

It is worth mentioning that when maker’s MCD was launched, a large part of MCD Sai migration was carried out through instadapp. On November 22, 2019, within 48 hours of the launch of multi mortgage Dai, Spencer noon, partner of doggie tail crypto capital, tweeted that 8.3% of Sai migration in MCD was carried out through instadapp, the mainstream defi protocol aggregation platform.

Wyre, a blockchain payment provider, initially only supported bitcoin and lightning networks. Its latest strategy began to march into Ethereum defi, which will allow users to interact directly with various defi platforms using debit cards. It takes new users only 20 seconds to start cryptocurrency.

Wyre currently supports platforms such as pillar, metamask, zerion, Portis, fortic, argent, opensea, Ambo, airswap, Nuo, floatify, outlet and incento. Because Wyre’s widget tool supports the purchase of cryptocurrency using apple pay and Google pay, this means that the defi platform supported by Wyre can also purchase cryptocurrency directly through apple pay and Google pay, Make sending cryptocurrency as simple as sending IMessage.

In addition, it is noteworthy that Ethereum application login process solution GSN is a project aimed at eliminating the use threshold of DAPP end users. Cryptocurrency users no longer need to go through those cumbersome multi-step login processes or even manage private key addresses. As an important part of GSN solution, DAPP developers bear the transaction cost for end users and take it into account the specific customer acquisition cost (CAC). Therefore, it depends on whether developers have a sustainable business model that can bear these costs.

Ramon recuero, product director of openzeppelin, said: “GSN is not only a necessity to guide DAPP users to get started and log in, but also the key to unlocking the blockchain business model.”. As an open source solution network, the transaction will be executed by a series of repeaters stored in the relayhub smart contract, which can access the GSN network without permission.

In the field of wallet, there is a trend of smart contract wallet, which can access funds without private key management. At the same time, it also takes into account the security characteristics of traditional banks, including account recovery, fraud protection, withdrawal restrictions, etc.

At the end of August 2019, Dharma, an encryption lending company, launched a second-generation product developed based on the compound agreement, which not only provided an interest rate of up to 11.2%, but the biggest change was that the new version was developed based on the compound agreement. The “real-time matching” realized by the compound working capital pool allowed the lender to obtain interest immediately, thus solving the delay problem complained by users before.

Dharma achieves this through a “smart wallet”, which automatically deposits customers’ funds into the compound protocol. Robert Leshner, founder of Dharma, said, “the new Dharma will provide a more user-friendly interface, and users can easily earn interest through full hosting.”. Although the specific effect of Dharma’s upgrade needs to be observed, the team hopes to provide better “availability, legal currency entrance and semi centralized wallet”. The key to this transformation is to abandon the contract layer and focus on the product layer, which means that decentralized financial products begin to focus on the product experience, which is of course to embrace more new users.

Emergence of bitcoin third-party rebate applications

Although bitcoin has not made significant progress in mainstream adoption, many third-party applications rely on bitcoin rebate as a highlight and are delivering fresh blood to the encrypted world. Led by lolli, a cryptocurrency rebate platform, the target users of some brands loved by young people are developed into bitcoin holders by providing bitcoin rebate activities for some brand buyers. Lolli’s relevant data show that the conversion rate of new bitcoin users is as high as 40%.

In fact, this rebate model itself is not complex, and there is not much innovation in the model. Like the rebate model in the Internet era, lolli is essentially price driven, but it has added the selling point of cryptocurrency.

When consumers buy these supported related brands through lolli, they can get 3-5% BTC rebate discount, and the rebate platform will charge a certain proportion of commission. Lolli’s data show that nearly 40% of lolli users are new users of cryptocurrency. As expected by Alex Adelman, founder and CEO of lolli, this model can effectively promote the use of bitcoin to the public.

Alex Adelman founded lolli, a bitcoin rebate platform in New York in March 2018. Previously, it founded cosmoc, an e-commerce website in 2012, which was later acquired by popsugar. As an entrepreneurial veteran in the e-commerce industry, Alex Adelman knows well the needs of businesses and knows this kind of e-commerce model very well.

How can users in the encrypted world find them

Lolli is not the only one. Other startups with similar models include fold, travelbybit, Pei, etc. in addition to rebate services, these products also include gift card and debit card rebates. The well-known brands involved include Wal Mart, gap, lululemon, 7eleven, McDonald’s, Uber, UNIQLO, Amazon, airbnb, Nike, chipole, etc.

More and more well-known brands are “cooperating” with third-party rebate applications such as lolli. Consumers can buy products through these platforms and get bitcoin rebate.

Of course, we don’t know how many consumers will successfully enter the pit, but we think that relying on bitcoin rebate as a highlight and choosing to “cooperate” with brands with certain “new school” user characteristics, the target users of these brands are often young, willing to accept new things and have high encryption friendliness, so as to obtain new users with high conversion rate, This is of great significance for introducing new users into the cryptocurrency world.

Internet giants enter the financial business and encircle the encryption friendly company

With the gradual slowdown of capital growth, major Internet technology giants in the United States are vying to covet the financial business originally belonging to banks. Google, together with Citigroup and Stanford University Credit Union, plans to launch a checking account “cache” through Google pay next year. Uber has established a new Department Uber money and launched a digital wallet Uber wallet, hoping to become a bank for drivers and passengers. In March this year, Apple announced the launch of the credit card business Apple card in cooperation with Goldman Sachs and MasterCard. The credit card includes the electronic virtual card built into the apple wallet of Apple mobile phone. At the same time, it issues physical cards to provide cash back incentives for users, with an annual fee rate of 13.24% – 24.24%.

Facebook announced the launch of the payment service “Facebook pay” after the collapse of Libra, a stable currency program, to integrate the payment of all its applications (Facebook, Messenger, instagram and WhatsApp). As early as early as 2018, Amazon sought bank cooperation to launch a checking account, but later quietly abandoned its early-stage plan because of fear of bank supervision.

Facing the problem of regulatory compliance, it is very difficult for Internet technology giants to share the financial cake. Google admitted to the Wall Street Journal that the reason why they joined hands with Citigroup and Stanford University Credit Cooperatives is that financial institutions can be responsible for handling financial back-end and regulatory compliance matters. Therefore, users’ credit cards will be named after these cooperative financial institutions.

In November this year, as the credit line evaluator of Apple card, an apple credit card business, Goldman Sachs was complained by users about gender discrimination in its operation. At present, the Financial Services Department of New York has launched an investigation into this incident. The incident originated from a post posted by David heinemeier Hansson, the designer of Ruby on rails, on twitter, saying that the credit limit of the credit card issued by apple to him was 20 times that of his wife, questioning the existence of gender discrimination in the operation.

Hansson did not disclose the credit amount, but said that he and his wife filed tax together, used the same tax return when applying for a credit card, and his wife’s credit limit was always higher than him, so he was surprised by the gap in the credit limit. The matter once put the project at the forefront of the storm, and was bombarded by Elizabeth Warren, the Democratic presidential candidate of the United States. Goldman Sachs said its apple card credit decision was suspected of discriminating against female applicants.

At the same time, some encryption friendly companies encircle from the side, expand cryptocurrency users on the basis of the original user base by providing retail investors with more purchase channels and rich products and services, including multi asset trading platform eToro, American campus loan platform Social Finance (Sofi) and square’s application cash app.

Among them, eToro launched the cryptocurrency exchange etorox, and its cryptocurrency wallet added 120 erc-20 standard tokens, including maker (MKR), basic attention token (BAT), omisego (OMG) and other copytrader functions that can follow all cryptocurrency transactions of single star traders for American users.

Sofi, a fast-moving American campus loan service provider, only announced its entry into the cryptocurrency market in February 2019. It launched the cryptocurrency trading service in September and will provide this service to 800000 users. Through cooperation with coinbase, it provides users in 36 states with BTC, Eth and LTC cryptocurrency trading services, and has obtained the approval of the New York State Department of financial services (nydfs) The two licenses granted are bitlicense and money transmitter licenses.

All the above efforts, whether to provide user-friendly cryptocurrency use experience, introduce high-quality physical assets or efficiently transform the growth strategy of new users, all point to the same direction, that is, to create real use cases for cryptocurrency and blockchain and find early users.

Blockchain, as one of the most destructive innovative technologies, represents the cryptocurrency of its asset value. Only by gradually transforming from a simple trading and speculation tool to an effective tool in the real world and truly bringing real value to ordinary people, can each ordinary user become a currency holder, so as to really start promoting global economic freedom. The chain believes that in the next few years, With the development of blockchain technology infrastructure and the continuous maturity of the industry, we will see the take-off of real use cases after the initial investment and speculation stage, which is the only way to find hundreds of millions of users of cryptocurrency.

Responsible editor: CT

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