By Matthew Gould, Founder and CEO of Unstoppable Domains
The scariest part of crypto has always been transferring it. That’s all changing with stablecoin usage up 59% since Q1 and the rise of blockchain domain names.
Ever since Satoshi launched Bitcoin (BTC) as “a peer-to-peer electronic cash system” in 2008, a major promise of crypto has been improving payments. In the years since, Bitcoin’s succeeded in many facets, but it’s failed in this regard. When Tesla (TSLA) briefly accepted Bitcoin payments for cars in early 2021, for example, people were struck by how difficult and opaque the process was. Due to the interwoven nature of the crypto markets, most other digital currencies haven’t fared much better in terms of fulfilling their potential for everyday spending.
Why spending crypto is so scary
There are two reasons for people’s fear of spending crypto, the first being market volatility. Who wants to spend a currency that’s provided better returns than just about any other investment of the past 10 years? No one can be blamed for holding onto their crypto.
In May 2010 an early Bitcoin adopter named Laszlo Hanyecz spent 10,000 BTC on two pizzas. At the time, the purchase equated to about $41. Now, 10,000 BTC is worth more than $321 million. No one wants to be like the Bitcoin pizza guy, so they hold on to their crypto as an investment instead of spending it.
Second, there’s a major ‘fear factor’ involved in sending crypto. With long alphanumeric wallet addresses, it’s terrifying to risk losing funds just by mistyping or copying and pasting an address incorrectly. Just one slip could lead to massive loss. This fear is valid: an estimated 4% of all available bitcoins are lost each year, and countless people have shared stories of losing their crypto by mistyping a wallet address.
As a so-called ‘solution’ to this, many crypto users test out a transaction by sending a tiny amount to confirm it’ll go through as planned before transferring the full amount of funds. Then, they have to wait for the test transaction to clear and appear in their wallet, which can take even longer. This adds unnecessary friction and fees to the process of sending crypto, making it totally impractical for regular use.
Solving decade-long challenges
The good news is that the confluence of two innovations in the blockchain sector are now solving these decade-long challenges. The rise of both stablecoins and blockchain domain names are opening the door to using crypto as a sensible and fear-free method of payment for the first time ever.
First, let’s take a closer look at stablecoins. Named because they are pegged to a stable asset such as the U.S. dollar, stablecoins are much more practical for making payments than a volatile cryptocurrency like BTC or ETH, and they’re available to buy or trade on many of the same exchanges. If someone spends $41 in stablecoins on pizza, for example, they’re not missing out on any potential profits. Plus, stablecoins have an advantage over fiat because they offer global, instant settlement and can be spent without limits put in place by the traditional financial system.
According to research by Messari, stablecoin usage is skyrocketing. In Q2 of this year, stablecoins facilitated $1.7 trillion in transaction volume, up 1,090% year-over-year and 59% since Q1. Institutions are already catching on, using stablecoins like USDC to facilitate faster cross-border transactions.
The second innovation making crypto payments practical is blockchain domain names. Blockchain domain names are a replacement for both regular “dot-com” domain names and crypto wallet addresses. Companies like Unstoppable Domains offer blockchain domain names as NFTs, granting users lifetime ownership and control. Instead of having a crypto wallet address that looks like this: “3FZbgi29cpjq2GjdwV8eyHuJJnkLtktZc5” you can have one that looks like this: “matthew.crypto” and use it across a large and growing number of compatible wallets and exchanges. Typing a simple username takes much of the fear out of sending crypto, making it just as easy as sending an email.
Crypto’s next era
These two innovations will lead to the rise of crypto as a viable payment method. Stablecoins provide a non-volatile asset for instant, borderless transactions, while blockchain domain names take the fear and friction out of payments. Together, they create a mechanism by which it finally makes sense to spend digital currencies.
It’s been more than a decade since Bitcoin ushered in a revolution, and now we’re on the brink of a new era of crypto. People are learning about stablecoins and taking ownership of their blockchain domains, and using them to power global payments outside of the traditional financial system. Much like how Venmo and CashApp made it easy to send dollars to anyone in the United States, stablecoins and blockchain domain names can do the same for crypto on a global scale.
About the author
Matthew Gould is the Founder and CEO of Unstoppable Domains, a blockchain domain name provider with more than 1 million registered domains. These blockchain domain names replace cryptocurrency addresses with simple usernames, making it easier to send crypto and interact with the decentralized web. Matthew’s background is in entrepreneurship, product and analytics leadership.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.