Three Truths About Crypto Assets Applications: Understanding and Misconceptions

Recently, the founder of an emerging company announced their latest strategy at a high-level gathering in the Crypto Assets sector. While the move to leverage policy advantages to enter the U.S. market is noteworthy, the real highlight is their rapid breakthrough into the mainstream consumer space. This signifies that Crypto Assets are shedding their niche label and truly entering the realm of everyday business.

The company's strategy is quite controversial: the idea of providing "real person authentication" through iris scanning may encounter resistance, even with promises to protect privacy. However, they are fully prepared for this bold plan.

Product value first, token incentives as a supplement

In the early days, the company also tried to attract users through token incentives. This method, known as the "Bitcoin success model", was actually a case of putting the cart before the horse. In early tests, they found that while excessive incentives brought in users, it also sparked criticism from privacy advocates and some developers.

Bitcoin's success lies in its revolutionary asset concept from the very beginning: decentralization, a fixed supply, and independence from central bank control. While mining rewards and price increases attracted early speculators, and later gained the attention of institutions and governments, it is the true builders who value its potential as a completely new asset and payment system.

The crypto world also needs to follow basic economic laws. Just like any startup project, the first step is to develop a practical product, and then consider using tokens to solve the initial user acquisition or ecosystem incentive issues.

Addressing the challenges of "infrastructure transformation"

The early crypto boom led many to believe that it could fundamentally change payment and financial systems in a short period. However, a decade has passed, and we are just getting started.

To bring encryption products into the mainstream market, it is essential to meet the usage habits of traditional users and merchants. This means that a bridge must be established between old systems and new technologies, which may require making some compromises that may not be ideal in the eyes of encryption purists.

This transitional phase is referred to as "infrastructure transformation". It is similar to the dial-up internet of the early internet era or the adaptation process of roads when automobiles first appeared. This technological transition period is often difficult to promote on a large scale and can only be gradually applied in specific scenarios.

Don’t fantasize about creating a globally universal wallet system that is not compatible with existing systems. The deposit and withdrawal of funds need to be as smooth as early PayPal to achieve true mainstream adoption.

This is why the new version of the application integrated mainstream payment systems as soon as it was launched. Trust, familiarity, and practicality are key. It is precisely because of the willingness to be "backward compatible" that traditional financial institutions were given the opportunity to observe and experiment, rather than being directly eliminated.

This approach is also driving the application of encryption technology in the field of cross-border payments. In the future, these technologies may become mainstream, but before that, they need to find a foothold in the existing system, optimize processes, and reduce friction.

The success of encryption technology depends on practical applications.

Like all new technologies, the success of encryption technology is not guaranteed. "Decentralization," as the core concept and most disruptive contribution of the crypto world, is not a foregone conclusion either.

Stablecoins are a great example. To interface with the traditional financial system, the crypto world created this tool. But it also brings new issues: the shadow of centralized management and closed networks re-emerges.

Although the open architecture may ultimately prevail, existing stakeholders will not easily give way.

Decentralized identity will face significant challenges once it disrupts the existing landscape. Centralized systems have inherent advantages in user experience and functionality. Therefore, if emerging companies want to take a shortcut, they first need to persuade users to be willing to provide biometric data. The response from the U.S. market will soon reveal whether they can find a balance between privacy and convenience.

Perhaps taking a more moderate approach would be wiser, such as first launching the familiar "certification badge," which can unlock additional features in commonly used applications. However, doing so may reduce the reliability of identity verification.

In the ongoing competition with AI, only highly secure biometrics can provide truly reliable proof of a real person. But that doesn't mean that the most aggressive approach has to be adopted from the start.

Real sustainable growth comes from the realization of daily value. If new applications can attract users through excellent payment experiences, combined with globally universal channels for fund circulation, there is a possibility of truly achieving breakthroughs.

Conclusion

Now, the key is to observe whether the Crypto Assets world can truly enter the mainstream market.

Regardless of whether this attempt ultimately succeeds or fails, we hope to see more crypto assets shift their focus from "token economics" and "price volatility" to developing truly practical everyday products.

Although this transition may not be as noticeable, it is a crucial step that the entire industry must take to enter the mainstream market.