Most people who use cryptocurrency to make purchases in the future might not even be aware of it.
Recently, everyone has been busy prognosticating the demise of crypto and Web3; to that I say, fair enough.
But a burst bubble is not the end of the story, as we all know from history. It often marks the beginning of a new one.
The next billion cryptocurrency users won’t own bitcoin, ether, or any other fungible tokens in the blockchain’s future. For the purpose of making purchases of goods and services, they will use fiat, which may later be converted into tokens.
The Crypto Era and the Web3 Era are the first two epochs that blockchain has experienced, and the third, the Abstraction Era, is about to begin.
The blockchain will essentially become infrastructure. We won’t discuss “the blockchain” either, much like how no one really talks about “the cloud” anymore. We won’t need to know or give a damn about which blockchain stores our purchases.
In the future, most people who use cryptocurrency to make purchases might not even be aware of it.
Not Bitcoin, but blockchain
I don’t start saving up a lot of euros in advance of a trip to Italy. All I care about when I get there and sit down at a restaurant is eating my pasta and drinking my wine. My credit card payment will be converted from dollars to euros. Fantastic if the back-end technology converts my fiat to USDC and then to EUROC while avoiding the merchant foreign exchange fees by using the Solana blockchain to carry out the conversion.
I don’t need to understand how the technology works because the restaurant is still receiving payment in euros and I am still using dollars to make my payment. I don’t need to focus on the blockchain technology that makes this transaction seamless.
The most fascinating aspect of this new era will not be the money itself, but the underlying technology: the blockchain.
And it’s already taking place: You can now purchase an NFT on OpenSea using dollars. In actuality, that is turning into their main call to action.
Despite the fact that no one ordering a pumpkin spice latte will ever require MATIC or care, Starbucks also revealed on Polygon that they would start giving customers “stamps” in their Odyssey loyalty programme.
According to Nansen, 4.3 million people have downloaded Reddit’s “Collectible Avatars” (noticeably not called NFTs) since September 2022, which is more than the total number of wallets with any NFTs at all (2.5 million) before September. You can buy these avatars using your country’s fiat money.
All of these are examples of how to eliminate those cumbersome steps from the waning Web3 era so that the end user can make their purchase with a single click as opposed to struggling through the entire laborious process themselves.
That is the abstract era at work.
predicting future events
Users could only benefit from the mobile evolution if they had access to a mobile device, some level of technical skill, and the willingness to alter their behaviour. Then, ardent crypto enthusiasts might assert that the crypto movement has only advanced as far as the initial mobile revolution.
When you break down the process we go through to use cryptocurrency, you’ll find that it involves signing up for an exchange, connecting your bank account, purchasing tokens, installing browser wallets, and connecting your wallet. And you must go through the entire process again if you ever need to exchange that token for cash: send the token back to the exchange, sell it, pay the fees, and then withdraw the money.
Was this — the cumbersome, erroneous procedure — what we were all so excited about?
On the other hand, the internet and technology have naturally developed into the cloud: Nowadays, everyone uses the cloud, often without even being aware of it. The end user doesn’t understand or care how the cloud operates, and using the cloud doesn’t require a new gadget, new technical knowledge, or new behaviour. Simply operating in the background, the cloud streamlines your experience.
Consider it like this: No provider brags about the cloud to their potential end user. The location of information storage and the appearance of the underlying technology are irrelevant to the end user. They merely desire a fantastic user interface and the assurance that their data is safely stored.
The evolution of blockchain technology is similar to this.
We’ll be making investments in cutting-edge companies and technologies in the abstraction era, and most of those will be based on the blockchain. There were many funds that referred to themselves as “cloud” funds or invested in “mobile,” but not any more because those distinctions would be absurd.
Similar to this, in about five years, it won’t matter whether a fund is a “Web3” fund. Where cryptocurrency or Web3 technologies or philosophies make sense, the best companies will just use them, and everyone will win.
The future is all about abstraction, and this new era will usher in the next billion users—who will actually be the first billion, given that neither our “crypto” era nor our “Web3” era were able to attract more than 100 million people.