When it comes to getting new users started with cryptocurrencies, it’s no surprise that there are a number of barriers that make it difficult to understand what’s going on. Without going into too much detail, we’ll be using this article to take a look at human-readable addresses, a crucial building block towards mainstream adoption. In particular, human-readable addresses:
- Replace long strings of numbers (0x2je3..) with a “username” like defirate.eth
- Can be tied to existing addresses, allowing for any wallet to be “upgraded” for a more intuitive payment process
- Can be used to accept multiple currencies from different blockchains, effectively serving as a universal wallet
For most new users, existing wallet addresses are ambiguous and unclear when it comes to sending their first transaction(s). As it stands today, legacy addresses can cause a lot of anxiety for those who are unfamiliar with the level of confidence most experienced users have when transacting.
Who’s Solving This?
In particular, there are two primary projects helping to make human-readable addresses a reality. Most commonly, many users have likely seen the recent hype around Ethereum Name Service, a provider that allows you to claim a .eth address and point it to your existing wallet. Over the past week, many notable community members have been claiming ___.ismoney.eth to evangelize the human-readable movement.
Beyond wallet addresses, ENS allows you to claim a wide range of Top-Level Domains (TLDs) and add text records (among many other things), meaning that you can add personal details to your address or host your own site using IPFS. For a full guide on how to get started, we recommend checking out this post from Eric Conner, co-founder of EthHub. As it currently stands, ENS boasts a strong roster of 15 mobile wallets, 4 mobile wallets and 32 dApps all rocking unique TLDs like .xyz or .link.
On the for-profit side of the spectrum, we have Unstoppable Domains, another entity that’s helping to set up human-readable addresses using the .crypto TLD. Similar to ENS, Unstoppable Domains allows users to accept 50+ major currencies. Just like ENS, users can also use their .crypto address to set up a domain that’s inherently censorship resistance by storing content through IPFS. UD first started by partnering with Zillqa through .zil domains and now looks to expand to a much wider audience in the coming year.
Why Does This Matter?
As we mentioned in the introduction, the existing onboarding process is quite time-consuming and confusing to new users. Moving forward, it only seems logical that human-readable addresses should become a defacto aspect of any new blockchain-based product. Similar to how we all register with usernames on social media sites like Twitter or Instagram, it seems logical that users should expect a similar experience when interacting with web 3 applications.
Beyond the ease of use, web 3 domains also allow users to share sensitive information to a broader audience. In regions of the world where specific information is censored or restricted, these domains provide an interesting solution for daring individuals to not only share information but incorporate a payment mechanism (i.e. Bitcoin or ether) that is trustless and not reliant on a third party to be processed.
Where Does DeFi Come In?
Smart wallets are continually playing an evolving role in the propagation of DeFi at large. Certain wallets like Argent and Gnosis Safe are already starting to encourage the use of human-readable addresses by partnering with ENS. In doing so, accessing the larger DeFi ecosystem becomes much easier as users can login with a “username” and quickly navigate to applications like Compound or Maker directly in-app.
Moving forward, we expect that composability will gradually increase, further building on the notion of having a universal login. If this theory does play out, it would seem logical that most users would like this login to be a username that they can resonate with rather than a long string of numbers.
If one thing is for certain, accessing blockchain-based products is becoming easier and easier by the day. In the next few years, we can theorize that many of the existing hurdles will be abstracted, allowing for the benefits of peer to peer payments, autonomous financial services and distributed data storage to truly prevail.
Cooper is the Editor of DeFi Rate and an active contributor to leading DeFi media outlets like The Defiant, DeFi Pulse, and Bankless. He works with early-stage teams through Fire Eyes DAO to incubate governance models and grassroots community development. He is an ambassador to Set Protocol and an author of a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.