The first step in using cryptocurrency is creating a wallet, storing the private keys and coming to grips with addresses. That’s quite a tall order, especially if you’re new and unfamiliar with crypto.
But if you could skip these steps and transfer tokens with something as simple as a QR scan, the digital asset industry could become far more accessible.
That’s the view taken by Linkdrop, a new protocol looking to streamline the initial onboarding process and enable more people from outside the space to interact with crypto.
“Onboarding is the biggest problem as I see it,” says Linkdrop co-founder, Gustav Friis.
Friis says there are three main components for onboarding: getting users onto the applications or wallets, providing assets to pay transaction fees, and private key management
Linkdrop takes a unique approach to onboarding. Instead of having to download a wallet and memorize seed phrases, the protocol allows users to receive crypto without a wallet address.
“It’s the easiest way to get started in crypto,” Friis said. “With Linkdrop you can be a brand new user…it’s the first way to send crypto without a receiver’s address.”
“The other user does not have to be a cryptocurrency user,” he added. “You could give this to your mother and she can click this link and she will have already received crypto.”
How did Linkdrop begin?
Linkdrop’s origins began at the Ethereum (ETH) developer conference, Devcon 4, in November 2018. According to Friis, the initial concept was devised during the hackathon. “Basically we were just very frustrated with how hard it is to get onboarded into crypto”, he said.
Development began soon after the end of Devcon. The project became part of ConsenSys’ 10-week Tachyon accelerator programme, which provided financial support and expertise.
In addition to Tachyon, the project has also received $50,000 in technical grants, as well as an additional $25,000 from Gnosis (GNO), an ETH-based prediction platform. The funding will enable Linkdrop to integrate with the Gnosis Safe, a two-key management fund for users’ digital assets.
The Linkdrop protocol is non-custodial, Friis says. That helps from a regulatory standpoint, as Linkdrop doesn’t actually hold onto funds at any part in the process.
It’s not necessarily the most secure option, but Friis said Linkdrop is not intended to be used to send large quantities of crypto. It’s what they call “progressive security“: for the sake of a dollar’s worth of crypto, there’s no need for strict security protocols, which may discourage new users.
Being based on Ethereum, Linkdrop will initially support Ether, ERC-20s as well as the non-fungible ERC-721 tokens. It uses QR codes, allowing a company to mass-generate thousands of tokens which users can easily redeem through their phones.
The team also has plans to create a way to store and transfer tokens on a web browser, which will make it even easier for new users to receive crypto.
A billion users in a year?
Linkdrop seeks to make crypto accessible. As the digital asset space expands, needing to understand private keys and wallet addresses will act as a barrier to adoption, Friis says.
On the other hand, if a user’s first interaction with crypto is simply scanning a QR code, the industry will see far more first-time holders turning into occasional or even frequent users.
Friis likens it to the tried and tested peer-to-peer referral campaigns – with discounts for new sign-ups – which services like Uber use to build a large community in a short space of time. Giving rewards for those who sign up “has proven to be a very good way to get users,” Friis says.
People who actually own crypto remain a tiny minority in most countries. Even Turkey, which has the largest population of crypto users, less than 20% of the total population had any digital assets.
But everything starts small. Chinese social media platform WeChat used a referrals program to build a billion-strong community of users in little over a year. Linkdrop believes it can do the same for crypto.
Attendees to this year’s Ethereal Summit were given a physical Burner Wallet, pre-loaded with tokens to buy lunch. Friis argues that instead of handing out cards, organizers could distribute QR codes, allowing digital assets to be automatically loaded onto users’ phones.
The sector could be overhauled by just putting crypto in people’s hands. Friis believes that once someone holds a digital asset for themselves, they’re more likely to experiment and eventually to use crypto on a regular basis.
Tachyon is a 10-week accelerator program by ConsenSys Ventures that takes early-stage blockchain projects from idea to viable MVP. The second iteration of the Tachyon Accelerator kickstarted on April 1st, 2019, at the Bundestag in Berlin, Germany, and the projects will present their progress in San Francisco on May 22nd, 2019.
Crypto Briefing has partnered with the Tachyon Accelerator to highlight a handful of the imaginative projects that are looking to change the world with Ethereum. We are not compensated by any organization for our work.