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Crypto’s Last Mile Problem

User experience is the last mile of cryptocurrencies. When crypto becomes as easy to use as Venmo/PayTM/Alipay, when you can ‘swipe’ some BTC (or more likely some DAI)  to your friend at a bar, or when your grandma can send you crypto for your Christmas or Diwali gift, that is the day crypto would truly have gone global and mainstream. LN and layer-2 and all that jazz notwithstanding.

Crypto’s Last Mile Problem

Could smartphones solve the last mile problem and propel mainstream adoption of cryptocurrencies? Clearly,cryptocurrencies are no longer a fringe asset class. However, there remains disproportionate difference between crypto’s role as an investment product and its daily utility as a medium of exchange, which again we believe stablecoins will solve for, to an extent. There have been indications of a potential surge in retail adoption through the rapid growth of the Lightning Network and Decentralized Finance (DeFi). However, building out an easily accessible infrastructure takes time. Given that things in crypto rarely move as fast people in the crypto-world think they ideally should, we might be at least a couple of years away before we can expect crypto to have the same level of mainstream penetration as something like, say, Uber. That said, we could always leverage existing infrastructure and add a crypto layer on top of it to bring the joys of crypto to people in an easy way. Smartphones can potentially be the catalyst that can get people to start using crypto and this is exactly what is happening. Last week, Samsungannounced that all it’s upcoming devices would provide crypto wallet support by default. Following Samsung’s announcement HTC announced the launch of their blockchain-friendly smartphone that is supposedly designed specifically for the decentralized web.

Samsung Smartphone Shipments By Year
Samsung Smartphone Shipments By Year. Source: Statista

Using Samsung’s S9 sales as proxy for S10 expected shipments, the total number of users who would be using S10 with built-in crypto support would be ~30 million. Assuming at least 1-2% users start using crypto because of S10’s native crypto support, we would have around 300k-600k users who will adopt cryptocurrencies. Moreover, Samsung’s inbuilt crypto support could force rivals to follow suit and if that happens, we can expect users with access to crypto wallets to soar multifold as the total shipments of smartphones is about 1.4 billion per year and is expected to go up meaningfully in the next 5 years. Couple this with other apps that use crypto, and you have the makings of a nice network effect here. Something like this happening is predicated on two related things – app developers investing in creating solutions that solve truely massive problems that affect the 99%, and not just the crypto faithful, and regulations continuing to evolve in a progressive manner, providing impetus to distributed ledger technologies.

Meanwhile in Crypto Wonderland….

“DApp Defection” In an announcement made last week, Effect.AI explained it has made the decision to leave NEO due to it not being up to speed with what the team is hoping to build with its AI network. The team specifically mentions NEO’s free transaction system as being a major cause due to its tendency to be overwhelmed by malicious spam attacks. Effect.AI further revealed that it considered moves to Ethereum (ETH), Komodo (KMD), Tezos (XTZ), and a handful of others before finally settling on EOS as the home for its development. Given that The Effect Network was one of the more high-profile dapp projects on the NEO network, the move is fairly significant.

“Swiss Banking Giant Ready To Dip Its Feet in Crypto Waters” One of the oldest and one of the largest bank in Switzerland, with $380 billion in assets under management and close to one trillion dollars in total assets, plans to provide storage, transaction and investment solutions for digital assets. Julius Baer, a private bank noted amongst fellow Swiss banks like UBS and Credit Suisse, plans to offer crypto services through a partnership with SEBA Crypto AG, a start-up that raised $100 million in September with Julius Baer being one of the investors.

“London Stock Exchange Funds A Crypto Startup” The London Stock Exchange (LSEG) has led a $20 million funding round for London-based Nivura, a blockchain startup primarily known for issuing the world’s first automated crypto bond. Nivaura is a digital platform which utilizes the blockchain technology to automate the issuance of bonds, derivatives, and equities.The process eliminates the need for human involvement; it leads to speedy administration and settlement using digital tokens, value-enabled assets that are issued on blockchain ledger, the technology which supports Bitcoin and Ethereum.

“Wirex To Pioneer Crypto Business Accounts”With the beta launch of crypto and fiat-enabled business accounts, crypto payments platform Wirex has taken a major step toward mainstream business acceptance. Using a cryptocurrency business account will eliminate the need to convert to fiat unnecessarily during inter-company fund transfers, validate crypto businesses in the wider marketplace, and offer some of the benefits traditional bank accounts provide business users. Wirex’ new business account allows clients to hold up to six multi-currency fiat and crypto accounts within a single account. These currencies include two fiat currencies (USD and GBP) and, for the moment, four cryptocurrencies (BTC, ETH, LTC, and XRP). In future, four additional cryptocurrencies and 13 fiat remaining fiat currencies (EUR, HKD, JPY, SGD, AUD, CAD, NZD, CHF, CZK, HUF, MXN, PLN, and SEK) will be added.

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