It won’t happen for any of the hardcore crypto reasons like “democratizing finance” or “decentralization”.

It will happen because the upcoming crypto UX is 10x better than web2.

Current web2 UX is actually horrible - we are just used to it. We all have 30 different financial app accounts, wait days for bank transfers to clear, hunt for and paste email confirmation codes, rebuild our social graph in each new app, and generally grind our way through the Internet.

It’s as if we are calling a taxi dispatcher, hoping the taxi shows up, and then awkwardly paying afterwards in the middle of traffic, but soon we will be able to just tap a button on our phone. The crypto tools coming online now make the Internet so much more usable that people will demand this new level of user experience from apps, even if they never know it’s crypto under the hood.

Near-instant, low-gas L2s are an obvious level-up. But there are four more unlocks that will push us well over the threshold of “better than web2”:

Passkeys are passwords or private keys that you don’t have to remember, can’t be stolen, and don’t have to be typed in. They are easy to create, are stored securely on your devices and cloud backups, and can be called back up later to sign messages or transactions easily using your device’s PIN or biometrics. Amazon, Google, LinkedIn, Shopify, Uber, and more all support passkeys now.

Web wallets are “cross-app embedded wallets”, a phrase coined by the Capsule team. These require no mobile app or browser extension to use, and pattern match what users expect from the Internet - SSO’ing into apps instead of the foreign and janky “Connect Wallet” flow of crypto today. These are made possible by passkeys, require no Sign in with Google / Apple / Twitter, and are cross-app so you can bring your identity with you around the Internet, unlike today’s embedded wallets.

With smart contract accounts and paymasters, gas will often be abstracted away, multistep transactions will be bundled up into one, and account recovery will be much more user-friendly. Users will be able to grant very constrained permissions (“session keys”) to specific apps to transact for them (like they give some apps the ability to tweet for them) so transactions can be one click with no confirmation pop up.

Like the promise of the original social apps, new social protocols like Farcaster are creating unruggable social graphs tied to users’ onchain addresses. This means any app that is aware of your address can build a personalized and social experience for you, as soon as you sign up.

For the next Friend.tech, Nikita Bier special, or Airchat, you’ll “Sign in with [Coinbase / Capsule / MetaMask / Binance / etc]” as easily as you sign in with Apple or Google. 

There won’t be 24-word backup phrases, wallet app downloads, or broken WalletConnect flows. There won’t be any “input the 6 digit code we emailed you” or typing in 4 different passwords for your Google account until you get the right one. It’ll be a simple confirmation using a passkey - even easier than today’s standard SSO flow.

Immediately when you enter, the app will be personalized to you, pulling in your onchain history and your social graph. Gone will be the days of dark patterns pushing users to share their contacts - your friends will already be there.

You won’t need to wait 72 hours for your ACH transfer to hit the next Robinhood app. You won’t need to transcribe your credit card. You won’t need to copy and paste your new app-specific address into your other wallet to transfer funds. Your funds will already be accessible via your web wallet.

You’ll go from no Bracket.Game account to betting on the same sports teams as your friends in 30 seconds instead of 3 days. Visit-to-activation rates will go from 1% to north of 10%. Product managers everywhere will rejoice.

Crypto wins because it makes the Internet more usable, and every web2 app will be forced to adapt. Finally, we’ll all have a rational answer to “why build this on crypto?”.

P.S. What this means for you:

Exchanges must reinvent themselves onchain to keep up, creating web wallets for their userbases. See Coinbase Smart Wallet as an example (choose the blue “Create a wallet” button instead of “I already have a wallet” when prompted).

Wallet apps that want to appeal to the mass market should add a web wallet offering.

Embedded wallet providers should offer cross-app experiences, like Capsule today, Dynamic’s upcoming global wallet, or Privy’s upcoming global wallet.

Apps should stop trying to recreate their own social graphs and use Farcaster. 

In this cross-app address-aware world, acquiring users will be more efficient with affiliate programs like GMX’s and Lido’s, and dapp creators would be wise to add their own or use providers like Spindl and Fuul.

Thank you to Nitya Subramanian, Wilson Cusack, Noam Hurwitz, Itai Turbahn, Bobby Thakkar, and Morley Zhi for feedback on this article.