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Ep 28: Crypto Wallets as the Browsers of the Future
119 Plays6 months ago
Akash Gupta (GM at Ava Labs) shares how transformative crypto wallets can be—from identity verification to the integration of social elements. Gain insights into the decentralized future and the large role of crypto wallets in shaping a secure and user-friendly digital landscape.
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Transcript
Introduction to OWL Explains Hootenanny
00:00:06
Speaker
Hello and welcome to this OWL Explains Hootenanny, our podcast series where you can wise up on blockchain and web3 as we talk to the people seeking to build a better internet. OWL Explains is powered by Avalabs, a blockchain software company and participant in the avalanche ecosystem. My name is Silvia Sanchez, project manager of OWL Explains and with that I'll hand it over to today's amazing speakers.
What are Crypto Wallets?
00:00:34
Speaker
Hi, everybody. Welcome to this Hootenanny. Today, we're going to be talking about crypto wallets and crypto wallets as browsers of the future specifically. Today, I am joined by Akash Gupta. And Akash is an engineer turned product tech executive with over a decade of experience app.
00:00:51
Speaker
early stage, growth stage, and large public companies across marketplaces, fintech, social media, e-commerce, you name it. Previously, Akash led product vision, strategy, and execution across large distributed cross-functional teams at Uber, Meta, and Staples. And he has also built, launched, and scaled several award-winning products with millions of users. And right now, he's working at Avallabs as the
00:01:17
Speaker
general manager and head of the consumer products business line. He oversees and manages a large distributed team across all functions from product management, engineering, design, data science, product marketing, and growth. So Akash, thank you so much for joining us today. Thank you for being on this podcast with us. Pleasure to be here. Thanks for having me.
00:01:40
Speaker
Great. So I always like to start the episodes with setting the context, you know, because I think that we have a wide variety of listeners and some people may be more seasoned on a topic than others. So before diving in, what is a crypto wallet? Why is it so important?
00:01:59
Speaker
Yeah, that's a great start, actually. I think the way I would like to approach it is basically just to chat a little bit about crypto wallets. A crypto wallet is a digital wallet that you will need if you use cryptocurrencies or manage digital assets. And with these wallets, you can basically store, send, receive digital assets, and wallets are like the browsers of the internet that basically make it easier to use technology underneath. And in this situation, a wallet makes it easier to use the blockchain that's basically built underneath it.
00:02:29
Speaker
Another way of looking at it is wallets are basically software-based cryptographic key pairs that enable blockchain network interactions such as holding and controlling your tokens. In the blockchain networks, wallets play a role akin to the role web browsers play for web users.
00:02:49
Speaker
So that's, you know, two different schools of thought to look at it. One is a little more, you know, for normies or folks who are new to crypto, and then one is sort of more around like a little more advanced definition of what wallets really are. But essentially, it's just a way to destroy your private keys and a way to interact with the blockchain and a presentation layer on top of the protocol.
00:03:11
Speaker
Great. Thank you for that. Thanks for that definition. Great explanation. And how do you see crypto wallets evolving to become more user friendly?
Simplifying Crypto Wallets
00:03:20
Speaker
Because this is obviously a relatively recent development, but how do you see the change, the evolution of them, especially for those that are not super familiar with the intricacies of blockchain technology?
00:03:35
Speaker
Yeah, I think there are a few ways to actually approach this entire sort of challenge. One is abstracting the technical complexities of blockchains. Blockchains are actually super, actually easy to understand around decentralized databases and validating transactions. But on top of it, what we really need to understand is how a user is actually interacting with all these different
00:03:59
Speaker
technologies that are working pretty magically underneath. So the way I try to look at it is make sure that it's user-friendly, make sure that onboarding is seamless, make sure that it's secure. And the first thing that people always ask is how are you making it easier? How are you making it more secure? Because that's the first thing that really people essentially care about. Is it easier and is it safer?
00:04:22
Speaker
When it comes to being easier, we think about onboarding as making sure that users have the choice and the freedom to pick how they want to onboard, whether it's with their password, with a seed phrase, with someone else doing the onboarding and the custody of their assets, or just making sure that they can do it with a hardware wallet as well.
00:04:44
Speaker
And we can touch a little bit about the types of wallets out there. I think it would be helpful to provide some context on the types of wallets as
Understanding Hot and Cold Wallets
00:04:52
Speaker
well. So I think that basically two types of wallets, they're hot wallets and cold wallets. And cold wallets, you know, these are wallets that store digital assets offline, when not in use, and make it less prone to scams and, you know, security breaches, essentially.
00:05:09
Speaker
Whereas hot wallets are connected to the internet and are commonly used by active traders, they can be hosted by an exchange of platforms and it's a very low learning curve making them very beginner friendly. So having a good balance between a hot wallet kind of user experience as well as a cold wallet user experience which is often thought of
00:05:28
Speaker
as self custody is something that, you know, it's really important to get people to be educated on it and make sure that they understand the difference before they move into these more advanced topics and subjects within the wallet world.
00:05:46
Speaker
Great. And I'm glad you mentioned that, because that was also another point that I wanted to clarify. There's hot wallets, and then there's the cold wallets. And they're not necessarily mutually exclusive. You mentioned that, for example, a hot wallet might appear more interesting to someone who's actively trading, and then the cold wallet more for storage, and how there's also different types of wallets that integrate in these functions. But also, in this world where browsers are
00:06:14
Speaker
how we access the internet, how do you envision crypto wallets, whether cold or hot, becoming the browsers of the decentralized web? What advantages would this particularly bring?
Crypto Wallets vs. Internet Browsers
00:06:27
Speaker
Yeah, that's a really interesting question actually and let's take a look at the biggest browsers today right on the internet. We have Google Chrome, Firefox, Brave, Opera, Edge, Internet Explorer. There are a variety in our plethora of them. The browsers basically that we use today abstract the complexity of the internet protocol layer by adding this beautiful intuitive user interface that interacts with the technology.
00:06:52
Speaker
However, as the technology or the underlying technology is getting adopted, ubiquitous and standardized, the browsers needed to be able to differentiate by becoming buttery smooth, super secure for the users. So there wasn't sort of a loyalty around using Google Chrome versus Firefox. So something that browsers needed to do to make sure that once the underlying technology was stable and standardized was to make sure that the browser was more performant
00:07:19
Speaker
bug-free, interactive, personalized, convenient for end users. And crypto wallets actually play the same role for the blockchain technology. So they're sort of a direct pattern that you can draw right here. And crypto wallet development has become increasingly relevant in recent years as adoption of cryptocurrencies is growing.
00:07:40
Speaker
And the need for cryptocurrency wallets has grown as more people make monetary investments in this future. So some of the advantages that I can kind of break down are twofold. One are for the consumers and the other one is actually for businesses as well because they have significant advantages in using crypto-based wallets. So let's take a look at some of the reasons or relevance for crypto wallets for end users, right?
00:08:08
Speaker
First and foremost, it offers a safe and practical way for handling their digital portfolio. And with the growing number of cryptocurrencies, it's becoming increasingly difficult for users to manage their investments across multiple platforms. So having a one-stop shop or an app to basically be able to do this at your fingertips across multiple platforms is something that crypto wallets really provide and also makes sure that we're keeping up with the new age.
00:08:38
Speaker
Secondly, crypto wallets compared to the conventional banking systems offer a better level of security. With traditional banking systems, users are at a risk of fraud or hacks or security breaches. However, with a crypto wallet, you have complete control over your digital assets and can take steps to secure that wallet using enhanced encryption methods, multi-factor authentication, and other security measures as well around going into cold storage and so on and so forth.
00:09:07
Speaker
This is something that the legacy financial system is adapting to and moving towards, but obviously this innovation has come more so because of cryptography that we actually use underneath the blockchain.
00:09:22
Speaker
Thirdly, for our users, crypto wallet development has the potential to revolutionize the financial industry. So cryptocurrencies offer this decentralized alternative to traditional banking systems that crypto wallets provide a way for users to access and manage their digital assets, whereas you can't really do that today in other sort of legacy financial systems. So while some of them are still catching up, but if I want to go to Vanguard today, I can't really do
Benefits for Consumers and Businesses
00:09:50
Speaker
that.
00:09:52
Speaker
And so that's more so in the consumer side. And if we look at things and the benefits of creating a wallet for the businesses, businesses in the digital currency sector, might gain a number of advantages by creating a cryptocurrency wallet app. And a lot of folks are actually moving in this direction.
00:10:12
Speaker
Businesses benefit through increasing user engagement and attracting new customers who are interested in using cryptocurrencies. They enhance their brand image as an innovative and forward thinking company. They also generate additional revenue streams by sort of charging fees for credit transactions or offering premium features for a subscription fee.
00:10:34
Speaker
And, you know, they secure customer data and protect it from hacks and other security tests. Therefore, streamlining these transactions, reducing transaction fees, which can obviously improve overall profitability and reducing middlemen with middleware. So I think those are sort of, that's like the balance and how sort of the advantages of how crypto wallets also help both consumers or end users, retail, so to speak, and also, you know, businesses that want to engage with that.
00:11:03
Speaker
That's great. I love that that recap and how you synthesized both the advantages on the consumer side and also on the business side. But I think that it's also worth mentioning that with a great privilege comes a great responsibility, you know, like just as you can't go to Vanguard today and be like, you know, give me my money right now. I think that when there's middlemen involved, it obviously makes the process longer and tedious. But now with wallets, people have this great advantage of
00:11:31
Speaker
managing their assets, having that full custody over their portfolios. But also, I think that it's so important to continue to educate people on, okay, this is a wallet, this is what you can do with it, but also protecting your keys, protecting your seed phrase. I think that the value of what you have eventually depends on how well you secure it and how well you protect it and the access to the wallet.
00:11:57
Speaker
I also wanted to highlight this, and the next question that I had for you is, you mentioned that we have all of this revolution on the financial side, on this decentralized platform, but how do you foresee crypto wallets seamlessly integrating into our daily digital experiences beyond just managing cryptocurrencies?
Crypto Wallets as Digital Identities
00:12:20
Speaker
That's a great question. Actually, it's very forward-looking, and it's also some areas where we're investing a lot within the consumer product space at Ava Labs. And I can chat about a few things that I think are direct primitives, direct use cases that we're seeing in the industry.
00:12:38
Speaker
Before doing that, I just want to make sure that folks understand a little bit more about how blockchain and blockchain networks, like wallets play a role that's akin to the role that web browsers played for web users. So if we double click on that and go a step further, we actually use the wallet as our identity, our decentralized digital identity on the blockchain, on the sort of new age internet.
00:13:07
Speaker
So when I think of identity, it's a way where you can actually verify credentials, verify proofs, you can make sure that you are in full control of the data that you're providing, the data that you're sharing, the connected sites that you're using with your wallet. So your wallet is, think of it as like your Gmail ID, but it's decentralized, it's digital, and you decide how much data you want to share from it. So these primitives have just kind of opened up
00:13:36
Speaker
a world of possibilities in the consumer space that users have been super excited about. Some of these are a digital representation of your physical ownership of digital assets. What that means is if you own a real estate, or you own a car, or you own a deed, or you have a license, or you have anything that has to happen on the blockchain, tokenization becomes a big aspect of how you can verify the fact that you
00:14:04
Speaker
specifically own something with your digital identity as opposed to everything just being on papers and old records that aren't really verified in so many ways.
00:14:16
Speaker
I also want to call out how users should be able to have more control over the personal data. I think what happened in the web tool and I was obviously working at a lot of these places is that you were actually sacrificing your data in the form of being given a get ease of use.
00:14:37
Speaker
you know, logging with your Gmail, but with it came so many nuances that, you know, people were actually not even aware that they were giving over their PII data. And we can chat a little bit more about this around like the policy concerns and so on and so forth. But I think with the wallet, you actually have ways to actually integrate with new primitives and new technologies like, you know, ZK proofs that are coming up as well.
00:15:02
Speaker
to decide how much information you want to share and have a sort of a comprehensive view or a dashboard of like where your digital identity has been used and instead of people paying, you being monetized, you can actually monetize the fact that you want to share your data that people actually pay you for it and these industries, these corporations will actually reward you for sharing certain digital data of your own
00:15:28
Speaker
So, you know, the idea here is sort of like flipping the entire sort of equation all the way around, right? Making sure that you are more in control. And this is sort of where I think, you know, these experiences are being built towards more and more. And we can touch more on how, you know, we're seeing some of these things build up as well.
00:15:49
Speaker
Of course, I love that. And I think that you've summarized it perfectly with the word identity because it goes beyond funds. It goes beyond how much you have stored in a wallet, but yes, it's like your Gmail ID. That is a great analogy. And of course with this, there's a topic which is interoperability, and I wanted us to go over this today.
00:16:13
Speaker
How important is interoperability between different wallet providers and blockchain networks? How can this be achieved?
00:16:22
Speaker
Yeah, interoperability is vital for the maturation and widespread adoption of blockchain technology. It fosters a collaborative environment where diverse blockchain networks can communicate, lead to enhanced functionality, more significant innovation, and increased efficiency. So interoperability also addresses scalability concerns, allowing blockchains to handle more transactions and operations without compromising on speed and security.
00:16:52
Speaker
The lack of interoperability between different wallet providers basically limits the usability of cryptocurrencies as users are basically forced to choose between using different wallets for cryptocurrencies to address this challenge. There needs to be a standardization and the development of common protocols that enable different wallet providers to just communicate with each other seamlessly. This is exactly why interoperability is needed so much.
00:17:22
Speaker
One of the things that we take a lot of pride in with the Core Wallet, homegrown at Avallabs, is that Core addresses this by actually building an in-built unified bridge that basically abstracts the complexity of interoperability and moving assets from one protocol to another, one chain to another, one subnet to another.
00:17:44
Speaker
And what we've done is we've actually built a layer or a UI on top of, within the wallet itself, but on top of the blockchain technology that integrates and aggregates the best of, you know, the interoperability networks, like the Avalanche SGXBridge, CCTV, CCIP, and of course, teleporter, which helps easily communicate between from one subnet to another subnet.
00:18:11
Speaker
So understanding that you want folks to actually do everything in one place without having to move from wallet to wallet or from browser to browser as people often dare to still do sometimes when they want a better search capability. We've actually consolidated that in core and actually made sure that interoperability is treated as a first-class citizen. That's fantastic and that is crucial. Now that you mentioned this,
00:18:40
Speaker
I think that another issue that arises is security and ease of use, because I think that people often have concerns about this. But how is Core Wallet addressing these concerns to make crypto wallets more accessible, more trustworthy for a wider audience?
Core Wallet's Security and Accessibility
00:18:57
Speaker
That's a great question. You spent hours and days and weeks and months thinking about this, so it's a thing that's really close to my heart. The use of self custody wallets has grown in popularity in the recent years, with many users recognizing the benefits of being essentially their own bank.
00:19:18
Speaker
However, there are still some challenges that must be addressed to make self custody more accessible and user friendly. So we kind of deep dived on this with a variety of different vendors, partners, but essentially what it came down to is the management of the technical complexity of your private keys, because that required a level of knowledge and expertise that is often beyond the average user.
00:19:45
Speaker
So as a result, there is a need for more user-friendly interfaces and tools that simplify the process of managing your private keys.
00:19:55
Speaker
At Core, we basically unified this and understood that the key tenets of Web3 were making sure that we could essentially do this. And Core unified the key tenets of Web3 by enabling simple, frictionless, and seedless onboarding while preserving self-custody and high security. It's a mouthful, but what that essentially means is Core's users
00:20:19
Speaker
are free to choose their favorite forms of sign-up, login, recovery without any trepidation or anxiety. So if you want to go and use a seed phrase, you want to use your social sign-ons, you want to use a ledger, you want to use a gold wallet, a hot wallet, Core empowers the user by giving them this freedom of choice.
00:20:37
Speaker
We've made a lot of investments in enhancing our UX. So some of the key tenants here were around unification, simplification, as well as transparency of your assets. So if you go to your mobile app, or you go to your extension, or you go to your web browser, you're able to see the balances the same throughout, and we make sure that our technology is supporting that. So by going multi-device, multi-platform, we made it easy for users to access their assets from anywhere.
00:21:05
Speaker
In addition to that, like I said, we also added interoperability protocols below that abstracted all of this, which makes it sort of the one-stop shop or the hub for user activity. And a lot of wallets are actually doing this, but where we actually start out was making sure that this is actually happening in a liquid fast, buttery, smooth way, and allowing users to make that choice as opposed to forcing them into a certain way of doing things.
00:21:35
Speaker
So providing that education, that low learning curve, making sure that it was highly secure, good support along the way, was something that, you know, Core does along the way to make sure that this is extremely secure as well as easy to use.
00:21:51
Speaker
For sure. And having that education, that support is what will really enhance the user's experience. And with that, I wanted to... I feel like I'm pulling your brain a lot about the future of wallets and your vision about that.
Future Trends in Crypto Wallets
00:22:07
Speaker
But what emerging current and future trends in wallets and in consumer space are you most excited about?
00:22:15
Speaker
Oh, wow. This is a laundry list. This is going to go down. Thanks for asking me this. I can go on on this for a while. But looking into the future, I think we can expect to see a continued focus on improving the user experience of crypto wallets.
00:22:31
Speaker
There are still some areas to actually break it down into making sure it's easy for the advanced user, the beginner, as well as the super user, so to speak, who knows how to be an advanced trader. So I think we can definitely improve it by making it more intuitive and having better interfaces, as well as the integration of additional features and services.
00:22:55
Speaker
But that's sort of table stakes at this point, and that has to be done. One trend that I see that is already emerging in crypto wallets is thinking of it as super apps, which offer a range of services beyond just storing and managing your digital assets.
00:23:12
Speaker
For example, some crypto wallets out there are now integrating with decentralized exchanges within their wallet experience itself, allowing users to trade cryptocurrencies without actually leaving their wallet interface at all. So having it all in one place, unification of it, making sure that they have onboarding, offboarding, seamlessly within the app is something that's emerging. But also partnerships, die-ups, loyalty points, these are things that are happening in the super app narrative.
00:23:40
Speaker
Kind of like how Uber became the super app for mobility, as well as delivery, as well as groceries, and so on and so forth. Crypto wallets are becoming kind of the super app with decentralized banking inside of it. And we will kind of go in that direction as well, and that's kind of what consumers are asking for.
00:23:59
Speaker
Another trend that we can expect to see shortly is the integration of social elements into crypto wallets. That's tied to people's decentralized digital identity. So this could include features such as messaging, productivity tooling, community building, allowing users to connect with others who share their interests in digital assets. So integrating social elements should basically help to foster a sense of community and increase engagement with the technology.
00:24:29
Speaker
And this can be taken further by NFT ticketing, brand loyalty. I spoke a little bit about five digital or physical digital assets. They're by allowing brands to better connect with consumers and listeners as well.
00:24:46
Speaker
Lastly, I think the areas where I'm seeing the most innovation is just a continued trend to improve the development of hardware wallets. These wallets offer an added layer of security as they store private keys offline, making them less vulnerable to hacking.
00:25:05
Speaker
However, the current generation of hardware wallets can be cumbersome and they require a level of technical expertise that is just way beyond the average user's tech savviness. So in the future, I think we can expect to see major developments on making hardware wallets more user-friendly, thinking of a hybrid version of self-custody as well as custodial wallets out there to make sure that this is accessible to a wider audience, essentially.
00:25:35
Speaker
So those three are, I would say, things that I'm keeping a keen eye on. And I think the consumer space is trending towards.
00:25:45
Speaker
For sure, I think that there's still a lot to see and I think that the possibilities are quite large. So I think it's also exciting to see how this continues to develop, how it continues to shape up.
Policy and Financial Inclusion
00:25:56
Speaker
And here at Owl Explains, we're very focused also on the policy side. So as we wrap up our discussion, how do you believe that the intersection of policy and crypto wallets can empower users and contribute to a more inclusive, to a more accessible financial system?
00:26:14
Speaker
That's a great question and we work very closely with our legal team, compliance, making sure that we are building the next generation of wallets, keeping in mind what's best for policy makers as well. So cryptocurrencies overlap with key parts of the global monetary and financial system.
00:26:34
Speaker
The rapid growth of these demands that policymakers and regulators consider, whether and how to fit them into existing systems or revise these systems for the new world, is extremely important for us to move forward. Another cornerstone of this is basically building good wallet products that
00:26:52
Speaker
have good security, a seamless user experience, allowing the easy use of money from one place to another without intermediaries. Educational content is something we work really closely with cross-functional partners to make sure that as we're innovating on the product and engineering side, we're also keeping in mind our duties from a policy as well as regulatory standpoint.
00:27:18
Speaker
One example of this is wallets should just automate the generation of tax forms directly within their wallets, right, instead of making sure that instead of going to third-party sort of tax tools that do that for you. So I think that's something that is
00:27:35
Speaker
This is something that we are looking into a lot. In addition to that, this should even be taken one step further by identifying what these jurisdictions are, making sure that we're operating in a compliant, friendly way. Wallets are also, I guess, they have a duty to protect user PII data and protect users against
00:27:57
Speaker
their data being monetized. And users should exactly know how and where the data is being used. Today, when I go to Google, I've signed up on so many different platforms with my Gmail or a different email account that I have no idea where all my data is being shared.
00:28:18
Speaker
So I think being wallets have the power to actually take a first principle approach, work closely with policy and regulators to make sure this happens.
00:28:29
Speaker
So that's something I would say is a critical part as we move forward. And ultimately, I do think that trustless decentralized products over time better protect customer funds whilst unlocking innovation. And that's essentially why I'm in crypto today.
00:28:51
Speaker
That was great, honestly. And thank you so much for just taking us through the development and also sort of like a sneak peek of all of these different possibilities and potential outcomes that we're going to see within the wallets. And also a huge shout out to Core, which is the wallet developed by Ava Labs, which interestingly also has an owl. I think that there's this recurring theme of the owls among Ava Labs. So to learn more about Core,
00:29:18
Speaker
And I want to invite our listeners to check out core.app. That's the official link. And Akash, thank you once again so much for sharing your vision of crypto wallets, defining them and also taking this, yeah, this exciting journey into seeing crypto wallets as browsers of the future, blending technology, policy, and user experience.
Conclusion and Core Wallet Invitation
00:29:40
Speaker
So thank you once again for joining us. Thanks for having me. It's a pleasure.
00:29:46
Speaker
All right, thanks Akash and thanks everybody for listening. We will see you next time at another one of our Owl Explains Hootenan.
00:29:55
Speaker
We hope you enjoyed our Hootenanny. Thank you for listening. For more Hootful and hype-free resources, visit www.owlexplanes.com. There, you will find articles, quizzes, practical explainers, suggested reading materials, and lots more. Also, follow us on Twitter and LinkedIn to continue wising up on Blockchain and Web3. That's all for now on Owl Explains. Until next time!