Cryptocurrencies are right around the corner, plotting to take over the world economy and while we can't deny their importance, there is still a huge step that needs to be taken regarding UX.
At Imaginary Cloud we know how a great user interface experience can make the difference between a failed product and a successful one. On this ground, we believe very firmly that this is the way in which cryptocurrencies platforms and applications will move in the near future.
Here we'll explain exactly how and why UX is the next big thing in cryptocurrencies, with the necessary context.
How Bitcoin succeeded where others have failed
"When Bitcoin currency is converted from currency into cash, that interface has to remain under some regulatory safeguards. I think the fact that within the Bitcoin universe an algorithm replaces the function of the government … (that) is actually pretty cool."
First things first, just in case you've been sleeping for the past decade and just woken up now, there are some concepts the are worthy to be reviewed in this introductory section.
Cryptocurrencies have a brief, but relevant, history. The attempts to create a digital currency started back in the 90s, way before the appearance of the now famous Bitcoin. The reason why those currencies were short lived? Security issues, mainly.
Fast-forward to 2009 and Bitcoin makes its glorious entrance, by the hand of an alias: Satoshi Nakamoto. To solve the problems that caused the demise of past attempts, instead of using a trusted third party to keep record of the balances and transactions, Bitcoin was based on a decentralized network.
Bitcoin Brief Timeline
- First transaction was made in 2009; a dollar (USD) was worth 1,309.03 Bitcoins (BTC) at that time;
- In the same year, Bitcoin currency exchange markets were established and mobile transactions were enabled;
- Bitcoin reached parity with USD in 2011 and with euro (EUR) on the following year;
- A growing list of companies is accepting Bitcoin as a method of payment, including relevant players as Expedia, Dell and Bloomberg;
- According to XE Currency Converter, a USD is now worth around 0.00010BTC.
The secret ingredient that allowed Bitcoin to flourish and succeed where many others have failed? Blockchain, a public record of all transactions that ever happened within the network.
In a simple way, Blockchain requires validation of every transaction by at least 51% of the users. Only then it is confirmed, becoming public and irreversible. This was the solution for the problem that led many past attempts to fail.
The possibilities of Blockchain go way beyond digital currencies, decentralizing transactions and eliminating the need of third parties in the process. It can be seen as similar to a peer-to-peer transaction, processed nearly instantly.
Long story short, Blockchain is the real game changer.
Where we're standing now on cryptocurrencies
Cryptocurrencies are currently gaining their fair share of the market, with Bitcoin still being the preferred currency. However, others, such as Ethereum, Ripple or Litecoin, are also finding their space in the market, each based on their own Blockchain version, with specific particularities.
We can expect that in the near future cryptocurrencies broaden their influence over a larger community, as they become a widely valid and accepted currency by both parts involved in any transaction. In any case, at this point it represents an opportunity not only for markets and consumers around the world, but also for developers.
Financial institutions are not yet fully prepared to integrate cryptocurrencies. Bitcoin saw the light of day less than ten years ago and it wasn't that long since it was recognized as a valid currency. It is understandable that the world of finance is trying to evolve and adapt as fast as possible.
The quickest route is almost never the best, but desperate times call for desperate measures. Financial institutions need solutions for problems that they did not foresee and are on the market to buy the quickest answer with minimum requirements.
Developers are eager to swim in this ocean as well, recognizing that this is an opportunity that won't last long. More precisely, it will last until the big sharks enter the business and chase away all the smaller fishes that are someway finding their way in now, just like Kodak did earlier this year. We're closing down on our main statement.
UX, the next big thing
There are already numerous applications and online platforms dedicated to cryptocurrencies. Either to exchange currencies, track market related news, manage your wallet or allow the transactions to happen. The problem is still focused on the infrastructure and even the biggest exchanges have trouble running smoothly.
Currently anyone can develop a basic application crypto-related and put the product out there with a good chance of success. It may be good for developers and satisfying for companies who are not willing to waste any time to get ahead in the game. The market is still on the land grabbing stage, but things are changing fast, as barriers to enter the market start to rise and countries kick-off a global effort to regulate operations using crypto assets.
The "if you build it, they will come" phase is ending. New players will have a harder time to enter the market and existing players will have to optimize their operations, which means tools easier to use. The ones that succeed will capture more users and will raise the bar for everyone else.
We don't mean to say that all development done in this period will be doomed to look terrible or impossible to handle, but it is, most likely, what'll happen in a lot of cases. While the dam is currently open for everyone to join the party, it won't be long until the game changes.
There are already some companies doing things right from the UX perspective. CoinBase's interface, the biggest American exchange for cryptocurrencies, has a very sleek and easy to use interface. Same goes for NiceHash, a market for hashing power heavily used by cryptocurrency miners (the people that ensure the trust part of the chain).
But if we look at the majority of what everyone else is doing, things get pretty scary. Try to use Bitfinex interface for the first time and I'm sure you'll spend a good 30 minutes understanding how you can buy and sell cryptocurrencies without making a huge mistake and ruining your investment. MiningPoolHub, an app similar to NiceHash, is also a pain to use. And the same scenario is applicable to portfolio tracking tools (like Cointracking or CryptoCompare).
User interfaces will overcome necessity as the main reason financial institutions seek technology for the digital coin era. Being functional will no longer be the only requirement and UX will definitely be the next big thing.
We've seen it happen numerous times before to other well-established businesses. No one today overlooks how ugly a smartphone might be, and lots of mobile apps nowadays ship with a great on boarding process. Engineers no longer develop whatever interface they have in mind and design teams sometimes have UX and visual designers. The jack-of-all-trades is long dead and designers have been specializing in either user experience or visual appearance. This is the norm for all software industries and will be the norm for crypto too. And it's not even a matter of when.
When the sharks take over, they will erase all of those developers who thought they could get away by providing a cheap solution. The first movers will have to up the ante. It's as clear as the water in which those sharks will be swimming. UX will undoubtedly up the game to a new level.
The road ahead
In 1996, Newsweek published an article in which the author described the Internet as a "trendy and oversold community", predicting a sad end for the World Wide Web. We all know how it went, but the point here is that progress isn't always consensual and doubt is always part of it.
There is a lot of speculation regarding the future of cryptocurrencies at this point. Nonetheless, it is not a mere concept anymore, lurking in the shadows waiting for someone to notice its existence. At this point we've seen that the early investors made the most of it, while skeptics regret having overlooked cryptocurrencies before.
Dozens of digital currencies surfaced since the appearance of Bitcoin back in 2009 and they are now on a transition to a phase in which they will be accepted by the masses in a more general way. This is the time to raise the bar on UX and those who anticipate that need will mark the pace of the near future.
We have solid reasons to believe that cryptocurrencies are here to stay and we have evidence that it's a mistake to overlook it. The journey just began, but currencies like Bitcoin are already relevant and not just a mirage in a distant future.
As their acceptance keeps growing, so will the basic requirements from the users. We can't underline it enough; UX is the next big step to take in order to keep growing as competition rises.
Similar to what happened with Bitcoin early investors, those who have the vision to anticipate the next step will be the ones that succeed. The only certainty that we have regarding the future of cryptocurrencies is that for it to be good, it'll have to look good.