So far, the term "cryptocurrency" has been a bit of a misnomer. An estimated 5 percent of Americans own some quantity of bitcoin, most likely purchased in an effort to capitalize on the currency's meteoric rise. In that sense, and because it's virtually useless for day-to-day transactions, bitcoin and other crypto assets have so far looked more like volatile investments than currencies.
To become a viable currency, all cryptocurrency must overcome some obstacles. First of all, any conversion of bitcoin into cash requires users to pay capital gains taxes because cryptocurrencies are defined as assets by the IRS.
Also, making a purchase with cryptocurrency is only realistic if you're looking to buy another cryptocurrency, which brings up the biggest hurdle: usability.
Cryptocurrencies might be decentralized, but they're also relatively inaccessible. Creating an exchange account, getting a digital wallet to safely store your currencies, and then trading currencies in the market all take a certain amount of technical expertise that few people have. With this barrier to entry, it's no surprise that apps such as Coinbase and Robinhood with the friendliest user experience are the most popular.
A Little UX Goes a Long Way
For digital currencies to take off, cryptocurrency developers must create more appealing design interfaces that work for everyone. Right now, apps are either built for brand-new traders or power users, with little in between. Whether a business model is based on taking a small percentage of transaction fees or selling subscriptions for advanced features, it should be desirable to gain additional users.
Once users have set up an account, linked payment methods, and verified the necessary information, most applications throw them right into the ring. Not only can this approach be lacking for a first-time crypto trader, but it's even harder for a user who's never traded stocks before.
To help users navigate the unfamiliar trading landscape, developers must provide basic instructions and tutorials to ensure the user has a good experience. Otherwise, most casual traders will sign up, take one look at the interface, and never log back in again.
Informed Users Stick Around
Well-designed UX provides users with the information they need to make informed decisions. Cryptocurrency developers could build a tool that asks a user questions and helps them decide which currency to purchase, or they could include links to established cryptocurrency resources. Whatever method they choose, developers must include proactive guidance to win over lifelong users.
To make things as user-friendly as possible, a German fintech company called Bitwala is opening a cryptocurrency bank that issues account holders with a debit card. Whenever users make a purchase, the bank automatically converts the digital currency into whatever currency the seller accepts. According to CEO Jörg von Minckwitz, around 35,000 people have signed up in advance.
Cryptocurrency isn't easy to use yet, but strides are being made. Companies such as Coinsource are creating cryptocurrency ATMs, Purse enables online shopping with crypto, and Yelp even includes a search filter that only shows businesses that accept crypto. The problem is that a search of businesses in New York City only reveals 11 of them.
Currently, a mere 8 percent of Americans own cryptocurrencies. Of those who don’t own any, only 8 percent have any plans to buy them in the future, and 27 percent feel that cryptocurrencies are too complicated to understand. For cryptocurrency developers to maintain a base of users, they will need to stop catering to those who have crypto and start attracting the 92 percent who don’t.
Tony Scherba is a CEO + Founding Partner at Yeti. Tony has been developing software since high school and has worked on digital products for global brands such as Google, MIT, Qualcomm, Hershey’s, Britney Spears and Harmon/Kardon. Tony’s writing about innovation and technology has been featured in Forbes, Huffington Post and Inc. At Yeti, Tony works on strategy, product design and day to day operations, hopping in and working with the development teams when needed. Follow Tony on Twitter.