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Validated | Why Crypto Needs a Mobile Revolution

By Validated

Published on 2023-04-18

Explore how mobile-first apps like Dialect are driving crypto adoption, the impact of state compression, and why chat could be the gateway to Web3.

The notes below are AI generated and may not be 100% accurate. Watch the video to be sure!

The Mobile Revolution in Crypto

The cryptocurrency industry has long promised a mobile revolution, but until recently, that promise has remained largely unfulfilled. Chris Osborn, founder and CEO of Dialect, believes that mobile-first applications will be a driving force of mass adoption during the next crypto bull run. With over 5 billion smartphone users globally, this prediction seems increasingly plausible.

Dialect, a Web3 messaging protocol built on Solana, is at the forefront of this mobile push. The company's smart messaging stack offers features such as dynamic, composable dApp notifications, wallet-to-wallet chat, and the ability to mint and trade chat stickers as NFTs. These innovations showcase the potential for mobile applications to transform the crypto user experience.

Why Has Mobile Adoption in Crypto Taken So Long?

Despite the prevalence of smartphones and the longstanding discussions about crypto and mobile, widespread adoption has been slow to materialize. Osborn attributes this delay to several factors:

  1. Technological challenges: The hardware and software capabilities of mobile devices have only recently reached a point where they can support the complex requirements of crypto applications.

  2. User experience complexities: Designing intuitive interfaces for crypto applications on mobile has proven challenging, particularly when it comes to wallet authentication and transaction signing.

  3. App store restrictions: Major app distributors like Apple and Google have imposed limitations on crypto applications, making it difficult for developers to create fully-featured mobile crypto experiences.

  4. Cultural paradigms: There has been a prevailing assumption that high-value crypto transactions should be conducted on desktop computers rather than mobile devices.

The Evolution of Mobile Crypto Apps

Osborn highlights the importance of wallet authentication as a key factor in the development of mobile crypto apps. The ability to prove ownership and identity on the internet through wallet authentication is a powerful new primitive that has revolutionized how we interact with digital assets.

However, the implementation of wallet authentication on mobile devices has been challenging. While desktop browsers have benefited from Chrome extensions for wallet connections, mobile platforms lack similar standardized solutions. This has led to a more fragmented and complex user experience on mobile devices.

Interoperability and Smart Messages

One of Dialect's key innovations is the concept of "smart messages." These messages allow users to interact with and execute any smart contract directly from the message interface, providing a seamless one-tap signing experience. This functionality demonstrates the power of interoperability in the Web3 ecosystem.

Osborn explains: "A huge part of the internet is like taking action on calls to action that come over some messaging medium. And the reason we're so excited about mobile and to finish this thought on kind of like the power of things being your fingertips combined with the interoperability of Web3 is protocols can send notifications. Users can share links to different resources on the internet together in dialect."

This interoperability allows users to take action on various Web3 protocols and execute transactions without leaving the messaging interface, creating a more seamless and intuitive user experience.

The Impact of Solana Mobile Stack and Saga

The announcement of the Solana Mobile Stack and the Saga phone in June 2022 was a pivotal moment for Dialect and other mobile-focused crypto projects. Osborn credits this event as the catalyst for Dialect's decision to fully commit to developing a mobile app.

The Solana Mobile Stack provides several advantages for crypto applications:

  1. Secure key custody at the operating system level
  2. Seamless signing experiences
  3. Improved interoperability between wallets and applications

These features allow for a more robust and user-friendly mobile crypto experience, addressing many of the challenges that have hindered adoption in the past.

Challenges with Traditional App Distributors

One of the significant hurdles faced by crypto applications on mobile platforms is navigating the restrictions imposed by traditional app distributors like Apple's App Store and Google Play. Osborn describes the process of getting Web3 applications approved as "kind of a nightmare."

The main challenges include:

  1. In-app purchase requirements: App stores often require applications to use their native in-app purchasing systems, which can conflict with decentralized crypto transactions.

  2. Uncertainty around crypto policies: There is a general lack of clarity regarding what crypto functionalities are allowed within mobile apps.

  3. Evolving regulations: The regulatory landscape for cryptocurrencies is constantly changing, making it difficult for app developers to ensure compliance.

These challenges have led many crypto projects to explore alternative distribution methods, such as the decentralized app store proposed by the Solana Mobile Stack.

Differentiating Web3 Chat from Web2 Counterparts

Dialect aims to create a messaging experience that goes beyond traditional Web2 chat applications. Osborn emphasizes that messaging alone is not enough to differentiate Web3 messaging from its Web2 counterparts. Instead, Dialect focuses on providing unique value propositions that are only possible in the Web3 ecosystem.

Some key differentiators include:

  1. Smart messages: Allowing users to execute smart contracts and interact with Web3 protocols directly from the chat interface.

  2. NFT chat stickers: Introducing truly ownable digital collectibles that can be used within conversations.

  3. Interoperability: Enabling seamless interactions between different Web3 applications and protocols through the messaging platform.

These features create a more engaging and valuable experience for users, setting Web3 messaging apart from traditional chat applications.

The Role of State Compression in Enabling New Experiences

State compression, a recent technological advancement on the Solana blockchain, has played a crucial role in enabling new experiences within Dialect and other Web3 applications. This innovation allows for significantly more data to be stored on-chain at a fraction of the cost, reducing the expense of minting NFTs by up to 26,000 times.

Osborn believes that this dramatic reduction in costs will drive innovation and unlock new use cases, particularly in the realm of digital collectibles and social experiences. He explains: "We see state compression and some of the things that are being built by Solana as really nicely timed and lines up nicely with this mobile adoption of being able to do more consumer and more abundant style things."

NFT Chat Stickers: A New Frontier in Digital Collectibles

One of the most exciting applications of state compression technology is the creation of NFT chat stickers within Dialect. These digital collectibles combine the popularity of chat stickers in Web2 messaging platforms with the true ownership and scarcity enabled by blockchain technology.

Osborn describes the user experience: "In Dialect, you claim these sticker packs that are almost like these little foil packs where the act of opening the foil pack mints a random set of stickers from the collection. And so let's say the artist does 20 different stickers. You might get eight, 12, maybe 15 of them. And each sticker is a varying rarity."

This innovative approach to digital collectibles has resonated with users, with over 100,000 chat stickers minted in just a few weeks since the feature was launched. The combination of social interaction, collectibility, and true digital ownership creates a compelling new experience for users.

Bridging the Gap Between Crypto Natives and Newcomers

One of the key challenges in the crypto industry has been onboarding new users who may be unfamiliar with blockchain technology. Dialect aims to address this issue by providing a seamless and intuitive entry point into the Web3 ecosystem.

Osborn explains how state compression enables this onboarding process: "By using state compression for these chat stickers, by using compressed NFTs, it allows dialect to subsidize that first experience in crypto and that first experience in web three, where I don't have to go through KYC and onboarding through an exchange, or I don't have to connect my wallet and do some other stuff. I get to do this thing that's a really, really mature and honed experience in web two, which is try before you buy."

This approach allows new users to experience the benefits of true digital ownership and interact with Web3 applications without the traditional barriers to entry, such as purchasing cryptocurrency or navigating complex wallet setups.

The Future of Mobile Crypto: Abundance and Consumer Experiences

As the crypto industry continues to evolve, Osborn believes that the focus will shift towards more abundant and consumer-friendly experiences, particularly on mobile devices. This shift is enabled by technological advancements like state compression and the increasing maturity of mobile crypto infrastructure.

Osborn predicts: "Mobile is where I am gonna be able to engage with my normy friends and really help them try things out right at their fingertips."

This vision of the future emphasizes the importance of creating accessible, intuitive, and engaging mobile experiences that can introduce a broader audience to the benefits of Web3 technologies.

Collaboration and Interoperability in the Web3 Ecosystem

One of the key strengths of the Web3 ecosystem is its emphasis on collaboration and interoperability. Dialect exemplifies this approach by working with numerous projects to integrate smart message functionality, allowing users to interact with various protocols and applications directly from the chat interface.

Osborn explains: "We are working with dozens of projects on smart message integrations. A lot of them are gonna be coming online in the coming weeks and over the next quarter. And it's really about bringing web three into chat."

This collaborative approach not only enhances the user experience but also helps to showcase the unique capabilities of Web3 technologies to a broader audience.

The Importance of Mobile-First Design in Crypto

As the crypto industry matures, there is an increasing recognition of the importance of mobile-first design. Osborn argues that mobile experiences are crucial for reaching mainstream users and driving adoption during the next bull run.

He states: "We see this as very much like our ability to subsidize and make this stuff vanishingly small in costs creates this massive kind of like collector's experience around massive supply and all of that. And it just wouldn't have been possible before state conversion."

By focusing on mobile-first experiences, crypto projects can tap into the vast user base of smartphone users and create more accessible and engaging applications.

Overcoming App Store Challenges

While app store restrictions have been a significant hurdle for crypto applications, projects like Dialect are finding ways to navigate these challenges. Osborn describes their approach as one of experimentation and iteration: "We ship quickly and we experiment and we iterate and we're kind of learning empirically what is allowed and what is not allowed."

This adaptive approach allows Dialect and other crypto projects to push the boundaries of what's possible within the constraints of traditional app stores while also exploring alternative distribution methods.

The Role of Hardware in Driving Crypto Adoption

The development of crypto-native hardware, such as the Solana Saga phone, plays a crucial role in enabling more seamless and secure mobile crypto experiences. Osborn highlights the importance of this hardware-software relationship: "That is a really intense and very thoughtful and deep design effort. And now it's actually also very closely related to the wallet standard itself."

By creating devices specifically designed for crypto applications, projects like Solana are helping to overcome many of the technical and user experience challenges that have hindered mobile adoption in the past.

The Evolution of Wallet Standards

The development of wallet standards has been a crucial factor in improving the user experience for crypto applications. Osborn mentions the work being done on the wallet standard by Solana Labs and other contributors: "I know the Solana labs and folks such as Jordan Sexton have been designing the wallet standard, which is now actually agnostic to Solana it really is just like this is from our best learnings over years of work."

These standardized APIs and interfaces make it easier for developers to create consistent and intuitive experiences across different platforms and applications, further driving adoption and usability in the crypto space.

The Potential of Chat as a Gateway to Web3

Osborn believes that chat applications have the potential to serve as a gateway for mainstream users to enter the Web3 ecosystem. He explains: "We have this incredibly high conviction that chat is the gateway to the next wave of crypto adoption."

By combining familiar messaging interfaces with Web3 functionality, projects like Dialect can create more approachable entry points for new users while also showcasing the unique capabilities of blockchain technology.

The Importance of Social Context in Crypto Adoption

One of the key advantages of chat-based crypto applications is the ability to provide a social context for learning about and engaging with Web3 technologies. Osborn emphasizes this point: "We think that with interoperability of web three, powered by the smart message, together with that kind of social context around chat, we really think that this is how users start to learn about the whole ecosystem and really like stick around and sort of like become convinced over time of the power of web three."

This social aspect can help to demystify crypto concepts and provide a more supportive environment for new users to explore the Web3 ecosystem.

The Future of Mobile Crypto: Beyond Messaging

While messaging is a critical component of Dialect's strategy, Osborn sees the potential for mobile crypto applications to expand far beyond chat. He describes Dialect as "a wallet, chat and web three content platform," highlighting the diverse range of experiences that can be created within the mobile crypto ecosystem.

As the industry continues to evolve, we can expect to see an increasing variety of mobile-first crypto applications that leverage the unique capabilities of smartphones and blockchain technology to create novel user experiences.

The Role of Education in Driving Crypto Adoption

Education plays a crucial role in driving crypto adoption, particularly when it comes to mobile applications. Osborn emphasizes the importance of creating intuitive experiences that allow users to learn about Web3 concepts organically: "We really think that this is how users start to learn about the whole ecosystem and really like stick around and sort of like become convinced over time of the power of web three."

By integrating educational elements into the user experience, mobile crypto applications can help to bridge the knowledge gap and make blockchain technology more accessible to mainstream users.

The Impact of Market Cycles on Mobile Crypto Development

Osborn acknowledges the cyclical nature of the crypto market and its impact on development priorities. He notes: "I think the race during this bear market is to create new experiences, new foundational primitives that will enable explosive adoption during the next bull run."

This perspective highlights the importance of using market downturns as opportunities to build and refine products, setting the stage for widespread adoption when market conditions improve.

The Convergence of Web2 and Web3 Experiences

As mobile crypto applications become more sophisticated, we're likely to see a convergence of Web2 and Web3 experiences. Osborn's description of Dialect's features, such as NFT chat stickers, demonstrates how familiar Web2 concepts can be enhanced and transformed by Web3 technologies.

This convergence has the potential to create more intuitive and engaging experiences for users, blending the best aspects of traditional mobile apps with the unique capabilities of blockchain technology.

The Importance of User-Centric Design in Crypto

Throughout the discussion, Osborn emphasizes the importance of user-centric design in creating successful mobile crypto applications. By focusing on intuitive interfaces, seamless onboarding processes, and engaging features like NFT chat stickers, Dialect exemplifies the shift towards more user-friendly crypto experiences.

This focus on user experience is likely to be a key factor in driving mainstream adoption of crypto technologies, particularly on mobile platforms.

The Role of Interoperability in the Mobile Crypto Ecosystem

Interoperability emerges as a crucial theme in the development of mobile crypto applications. Osborn highlights how Dialect's smart messages enable users to interact with various protocols and applications without leaving the chat interface.

This level of interoperability not only enhances the user experience but also showcases the unique value proposition of Web3 technologies. As the mobile crypto ecosystem continues to evolve, we can expect to see even greater levels of integration and seamless interaction between different applications and protocols.

The Potential for New Business Models in Mobile Crypto

The discussion touches on the potential for new business models enabled by mobile crypto applications. Osborn mentions the success of chat stickers in Web2 messaging platforms and how NFT chat stickers could create new revenue streams for artists and creators in the Web3 space.

This example illustrates how mobile crypto applications can not only enhance existing business models but also create entirely new opportunities for value creation and monetization.

The Importance of Community in Mobile Crypto Adoption

Throughout the conversation, the importance of community in driving crypto adoption becomes clear. Osborn describes scenarios where users invite friends and family members to try Dialect, highlighting the role of social connections in introducing new users to Web3 technologies.

This community-driven approach to adoption leverages existing social networks and trust relationships to help overcome the initial barriers to entry that many people face when exploring crypto for the first time.

The Evolution of Digital Ownership in the Mobile Era

The concept of true digital ownership emerges as a key differentiator for Web3 technologies, particularly in the mobile context. Osborn emphasizes how NFT chat stickers provide users with a tangible experience of owning digital assets, creating a more engaging and meaningful interaction with the technology.

As mobile crypto applications continue to evolve, we can expect to see more innovative applications of digital ownership that leverage the unique capabilities of smartphones and blockchain technology.

The Role of Mobile in Democratizing Access to Crypto

Mobile devices have the potential to democratize access to crypto technologies by providing a familiar and accessible entry point for new users. Osborn's description of Dialect's onboarding process, which allows users to mint their first NFTs without any prior crypto experience, illustrates how mobile applications can lower the barriers to entry for blockchain technology.

This democratization of access could play a crucial role in driving mainstream adoption of crypto and Web3 technologies in the coming years.

The Future of Decentralized Identity on Mobile

While not explicitly discussed in the transcript, the conversation touches on themes related to decentralized identity and authentication on mobile devices. As wallet authentication becomes more seamless and integrated into mobile operating systems, we may see a shift towards decentralized identity solutions that give users greater control over their personal data and digital presence.

This evolution could have far-reaching implications for privacy, security, and user empowerment in the digital age.

Facts + Figures

  • Over 5 billion smartphone users globally
  • Over 80% of crypto transactions are still initiated from desktop class web browsers
  • Dialect launched in early March 2022 as open source developer tools for messaging and notifications
  • Solana announced the Saga phone and Mobile Stack in June 2022
  • State compression reduces the cost of minting NFTs by up to 26,000 times
  • Dialect users have minted over 100,000 chat stickers in just a few weeks since the feature launched
  • Dialect is working with over 150 artists on NFT chat sticker collections
  • Some NFT chat sticker collections have stickers with over 100,000 in total supply
  • Major Web2 messaging platforms like Line make hundreds of millions in revenue from chat stickers annually
  • Top chat sticker artists in Web2 platforms can make millions in revenue

Questions Answered

What is Dialect?

Dialect is a Web3 messaging protocol built on Solana. It offers features such as dynamic, composable dApp notifications, wallet-to-wallet chat, and the ability to mint and trade chat stickers as NFTs. Dialect aims to create a messaging experience that goes beyond traditional Web2 chat applications by providing unique value propositions that are only possible in the Web3 ecosystem.

Why has mobile adoption in crypto been slow?

Mobile adoption in crypto has been slow due to several factors. These include technological challenges, user experience complexities, app store restrictions, and cultural paradigms. The hardware and software capabilities of mobile devices have only recently reached a point where they can support the complex requirements of crypto applications. Additionally, designing intuitive interfaces for crypto applications on mobile has proven challenging, particularly when it comes to wallet authentication and transaction signing.

What are smart messages in Dialect?

Smart messages are a key feature of Dialect that allow users to interact with and execute any smart contract directly from the message interface. This provides a seamless one-tap signing experience, demonstrating the power of interoperability in the Web3 ecosystem. Smart messages enable users to take action on various Web3 protocols and execute transactions without leaving the messaging interface, creating a more intuitive user experience.

How does state compression impact mobile crypto applications?

State compression is a technological advancement on the Solana blockchain that allows for significantly more data to be stored on-chain at a fraction of the cost. This reduces the expense of minting NFTs by up to 26,000 times. For mobile crypto applications like Dialect, state compression enables new experiences such as NFT chat stickers and allows for more abundant and consumer-friendly interactions. It also makes it possible to subsidize users' first experiences in crypto, lowering the barriers to entry for new users.

What are NFT chat stickers?

NFT chat stickers are digital collectibles that combine the popularity of chat stickers in Web2 messaging platforms with the true ownership and scarcity enabled by blockchain technology. In Dialect, users can claim sticker packs that, when opened, mint a random set of stickers from a collection. Each sticker has varying rarity, creating a collector's experience similar to trading cards. This innovative approach to digital collectibles has resonated with users, with over 100,000 chat stickers minted in just a few weeks since the feature was launched.

How does Dialect approach the challenges of app store restrictions?

Dialect navigates app store challenges through experimentation and iteration. They ship quickly, experiment with features, and learn empirically what is allowed and what is not allowed by app store policies. This adaptive approach allows Dialect to push the boundaries of what's possible within the constraints of traditional app stores while also exploring alternative distribution methods. They also work on creating seamless onboarding experiences that comply with app store regulations while still providing users with the benefits of Web3 technology.

Why does Chris Osborn believe chat could be the gateway to Web3 adoption?

Chris Osborn believes that chat could be the gateway to Web3 adoption because it combines familiar messaging interfaces with Web3 functionality. This creates more approachable entry points for new users while showcasing the unique capabilities of blockchain technology. Chat applications provide a social context for learning about and engaging with Web3 technologies, which can help demystify crypto concepts and provide a supportive environment for new users to explore the ecosystem. The interoperability enabled by features like smart messages also allows users to interact with various Web3 protocols directly from the chat interface, demonstrating the power and potential of the technology.

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