How mobile still trails desktop in web3

Smartphone adoption has been steadily growing worldwide with an estimated 86% of adults owning one (exact percentages may vary depending on who you ask). But when it comes to crypto and web3, are people relying on their phones in the same way?

Where’s the hard data?

Due to the nature of web3, the decentralisation of apps and privacy-first principles, it’s harder to find useful statistics about usage and devices.

If we ask the myriad of chat AIs for some data we are told that mobile wallets account for 65% to 85% of the market share (with 35% to 15% being desktop wallets), however, if we ask about self-custody wallets – wallets where the private keys that allow you to make operations are stored locally on your device – we are told 20% to 60% are using a mobile phone (with 80% to 40% on desktop).

These statistics can be widely inaccurate, but they do provide a hint about how people interact with web3 on smartphones. The majority of the interactions are probably related with purchasing and selling cryptocurrency, which will likely be connected with an exchange, and therefore will be using a custodial wallet – the exchange holds the private keys that enable wallet operations.

What are the obstacles?

This begs the question that matters the most to us – people building products on the blockchain – if most of the wallet holders on mobile are using exchange-tied wallets, how many of them will also be willing to use an independent wallet that can be connected to Decentralised Applications (DAPPs) and interact with the blockchain directly.

There are 3 issues we see that can pose an obstacle to web3 adoption in smartphones: 1) the first one is the UX of connecting a wallet app with a DAPP in a browser, 2) the second is the lack of responsiveness and adaptability of DAPPs to small screens, and 3) the third is the lack of alternatives for cold storage systems for smartphone wallets.

Currently, there are at least two ways of connecting a wallet app with a DAPP. Some wallet apps include an in-app browser that has access to the wallet, however, these browsers are severely limited by the smartphone OS and very hard to debug for developers building DAPPs. The alternative is to use WalletConnect – a service that creates a communication channel between the browser and the wallet app – however, this requires people to trust WalletConnect, and unfortunately the real experience of using it is not very stable or smooth and requires jumping between apps for every operation. Both these issues lead to frustration and present high entry barriers for newcomers.

The second issue relates to how DAPPs scale and adjust to smaller screens. Especially when the product is very data heavy, there still isn’t a good solution for displaying all that information on a small screen. Adding on top the fact that some of these operations include large sums of money, combined with the amount of scams going around, most people will be cautiously averse to using mobile phones to perform them.

Finally, it is well known that using a hardware wallet can prevent most of the software based attacks by relying on a physical device for signatures. However, there aren’t many hardware wallets from reputable brands that are compatible with smartphones. And the ones that exist rely on wireless communication methods (bluetooth and NFC) which unnecessarily introduce an attack vector. Also, they still connect to the wallet app, not the browser, so people have to keep jumping around to perform any operation.

What’s next?

Most of the issues mentioned above can be solved in the near future, especially if smartphone manufacturers make crypto a priority and provide a tighter integration: exchange-tied wallets could enable interaction with DAPPs. Some exchanges’ mobile apps have integrated with specific DAPPs, but the selection is usually limited, as exchanges don’t want to be liable for loss of funds; improving the UX of wallets on mobile, both when connecting a wallet app in the browser and by applying mobile-first principles when designing the interface for DAPPs; and lastly, adding compatibility for hardware wallets directly into mobile web browsers, preferably with direct cable connection to the phone.