Web3 Tech Is Awaiting Its Windows Moment: What Are the Biggest Challenges in User Onboarding?

The development of Web3 has brought forth a new era of technology, offering users decentralized control and fostering trust and security through blockchain technology. 

As the industry continues to experience exponential growth, with some government organizations even jumping on board, industry experts are expressing concerns regarding the user onboarding of Web3 — suggesting there are a number of challenges before everyday people jump in. 

What have Web3 companies done so far to make user onboarding easier, and what else needs to be done?

Key Takeaways

  • Over the last couple of years, Web3’s onboarding process has evolved, significantly mirroring Web2’s familiar profile structure and enhancing user experience and accessibility. 
  • Despite progress, Web3 still faces challenges in user interface and experience. Clunky interfaces and regulatory uncertainties hinder mainstream adoption. Complexities in technical knowledge and decision-making pose additional barriers.
  • Educating users about blockchain principles and emphasizing self-custody is crucial for empowering users and driving Web3 adoption.
  • Web3 interfaces must prioritize simplicity and aesthetics to cater to both technically experienced users and newcomers.

Industry experts note that Web3 user onboarding has seen a lot of changes since its early days of inception, and the term itself was popularised by Gavin Wood, co-founder of Ethereum (ETH).

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In fact, Web3’s evolution took a more structured form when Ethereum introduced techniques such as signing messages with cryptocurrency wallets for authentication and unlocking access to apps and data, according to Chris Were, the CEO of Verida Network

He added that since then, Web3 technologies have managed to mirror the familiar profile structures of Web2 through the rise of identity platforms and profile systems that provide users with the ability to bring personal elements such as their name, avatar, and other relevant information into Web3 applications. 

Other industry experts noted that Web3 technologies have undergone a three-phase evolution, essentially dominated by tech-savvy individuals, then a surge of speculators (especially during the FTX and LUNA scandals), and finally a notable influx of everyday users who are more engaged with the technology, including decentralized apps (DApps) and other utilities of the Web3 environment. 

Anastasia Ulianova, the co-founder and co-CEO of ARIA, added that the final shift reflects a broader and more practical adoption of Web3 technologies. 

However, because the Web3 industry is still so new, in order for it to reach the “next billion users,” it must continue to undergo mass changes, specifically in phasing out most major technical complexities often associated with blockchain technology, Vineet Singh, the senior product manager at VeChain said. 

“In doing so, Web3 projects will help drive mainstream adoption by embedding Web3 into business and everyday applications.”

User Interface & Experience Continue to Be “Clunky”

Erasmus Hagen, the director of product at Concordium, told Techopedia that one of the central topics of discussion when it comes to Web3 user onboarding is user interface and experience, which has “tended to be extremely clunky.”

“Due to the technical know-how required as part of user onboarding, such as setting up a wallet, only those truly passionate about Web3 were committed enough to see the process through in the industry’s early days.

 

“As the blockchain technology moved from a passion project among a clique of tech-savvy cryptographers into the mainstream, great strides have been made by many Web3 projects in removing this adoption hurdle.”

However, in Hagen’s opinion, user experience (UX) and an uncertain environment continue to remain some of the biggest challenges in Web3 user onboarding. With regulators in the US and Europe continuing to enact stronger regulatory measures on Web3 technologies, the challenges continue to add up, leaving only those blockchain networks that can combine the benefits of both legal compliance and decentralization to move ahead of the game. 

VeChain’s Singh added that another barrier in Web3 user onboarding is the much higher technical and general knowledge of entry. 

“I think this has been an issue with the Web3 space for some time, where the features and services have simply been inaccessible for the vast majority of potential users due to the complexity of the space. On the other hand, Web2 has had decades to fine-tune UX, adapting to new mediums of use like smartphones and tablets.”

Moreover, despite Web3’s superiority and offer of more possibilities, the technology is a little more complicated for the general public to grasp. ARIA’s Ulianova highlighted that a number of emerging Web3 projects now, such as ARIA itself, are working on “smoothing out this complexity to enhance user experience” despite the overall challenges in the crypto space.

Departure From Web2 Familiarity Also Poses Challenge in Web3 User Onboarding

Verida Network’s Were said that another primary challenge in onboarding users to Web3 platforms lies in the initial departure from the familiar Web2 space into the unfamiliar Web3. 

“This shift introduces a considerable learning curve, particularly evident when users encounter the necessity of having a crypto wallet for signing into a Web3 application.

“The statistics are telling – a whopping 50% of individuals disengage when prompted to utilize a crypto wallet, representing a substantial pain point and a barrier to widespread adoption.”

On top of that, once users acquire a wallet, they are faced with another hurdle stemming from the diverse types available – hardware wallets, browser extensions, and mobile wallets, hence faced with more decision-making. 

In addition, understanding non-fungible tokens (NFTs), different blockchain networks, and decentralized exchanges (DEXs) could also pose an additional pain point to users who may not be as tech-savvy. 

ARIA’s Ulianova compares this to the early days of personal computing, where systems like DOS were the default until the creation of more user-friendly interfaces like Microsoft Windows

“We are currently in a similar ‘DOS’ phase in Web3, awaiting our version of ‘Windows’ to bring mainstream adoption.”

Bridging the Knowledge Gap Will Empower Users 

Needless to say, Web3 companies continue to move towards improving their user experience. ARIA’s Ulianova noted that an important aspect of bringing more users into the Web3 experience is through organized decentralized initiatives that focus on explaining key blockchain principles, emphasizing the best security practices, and showcasing the benefits of decentralized systems. 

Moreover, understanding the fundamentals of Web3, such as self-custody, is “one of the most important components” for new Web3 users, VeChain’s Singh highlighted. 

“The average person still doesn’t understand this and other key benefits of blockchain technology and tends to have negative misconceptions about the industry, leading to a lack of faith in it. Additionally, enterprise use cases and real-world value are not widely broadcasted, meaning individuals struggle to see how the tangible benefits they can get from Web3 applications. 

“Improving general awareness of the tech will drive adoption, and as more users are onboarded, there will be a bigger pool of feedback on the user experience for projects to learn from, which will lead to developments in Web3 accessibility.”

Verida Network’s Were, on the other hand, told Techopedia that while education about Web3 technology is important, the industry needs to find a balance between a simple learning process and the more friendly side of Web3. 

“As things continue to change, we need to teach users in a way that empowers them without overwhelming them.”

The Next Step in Web3 – A Simpler Design

Because the Web3 industry was primarily dominated by engineers and developers, most designs of Web3 applications were catered towards them in a sense through which they could see the workings of Web3 more than its functions. In a similar way to how a technician enjoys looking at the engine of a car. 

However, for Web3 technologies to be more accessible to the general public they must also be aesthetically appealing for the general public. 

“Most drivers want to see a steering wheel and a speedometer, and that’s it. In the next generation of Web3 projects, human-centered design must ensure that the interfaces will accommodate and satisfy the needs of the end-users—both those who are technically experienced and those who need less complexity and more guidance,” Concordium’s Hagen explained. 

This can also be implemented through browser plugins that automatically onboard and personalize a user’s browser for any Web3 application. 

“As you surf the web, the plugin could detect Web3 apps and upgrade your experience without needing to share your data with a third party.

“It’s a potential future where web3 transforms how we use websites and apps, introducing the idea of zero-click onboarding. All this is possible because Web3 should never share data with the developers, meaning your information never leaves your local computer but still provides a personalized experience,” Verida Network’s Were explained.

ARIA’s Ulianova added that as time goes by, user-friendly blockchain interfaces are on their way to becoming more intuitive, making interaction with blockchain solutions seamless with interoperability protocols facilitating smoother transitions between different blockchain networks. 

The Bottom Line 

Over the last 15 years, the Web3 industry has seen waves of innovation, including self-custodial wallets, hardware wallets, custodial services, account abstraction, and token abound accounts, VeChain’s Singh told Techopedia.

While the Web3 industry has made significant strides in simplifying the user onboarding process, challenges continue to persist. Industry experts noted that bridging the knowledge gap through education and simplifying design are crucial steps toward mainstream adoption.

As the industry continues to evolve, a collaborative effort between developers, regulators, and users will be essential to realize the full potential of Web3 and its transformative impact on the digital landscape.

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Iliana Mavrou
Crypto journalist

Iliana is an experienced crypto/tech journalist reporting on blockchain, regulation, DeFi, and Web3 industries. Before joining Techopedia, she contributed to a number of online publications, including Capital.com, Cryptonews, and Business2Community, among others. In addition to working in journalism, she also has experience in tech and crypto PR.  Iliana graduated from the City University of London with a degree in Journalism in 2021. She is currently pursuing a Master's degree in Communication.