In the next decade, crypto wallet is likely to replace the exchange as a user portal
Looking back over the past decade, Mao said security issues and infrastructure defects motivated Cobo to develop the crypto wallet; looking into the future, Mao said the crypto wallet could also lead to other innovations.
Co-founder and CTO Jiang said the current number of digital currency users is about 35 million, the value of digital assets is about 200 billion dollars based on the latest market value. The value of major public chain assets is above 100 million yuan. The number of funds for digital asset management in the world has exceeded 500, and the value of the digital asset being managed by these funds has exceeded ten billion dollars.
According to the University of Cambridge’s “Global Cryptocurrency Benchmarking Study” report, the total number of encrypted wallets (accounts) in 2016 was 8.2 million, and that number reached 35 million in 2018, an increase of more than threefold. Domestically, the number of digital asset management companies and crypto wallet startups has also grown rapidly in the past two years. In addition to Cobo, well-known companies include imToken, ColdLar, YeeCall, Qbao, and Bepal.
“The crypto wallet could become the major portal in the blockchain world. In the future, more people will use crypto wallets first and then use other services,” Mao said. “Many people still can’t imagine the asset form and payment scenarios of the digital asset era. Yet, it is an irreversible trend that digital asset has become a key part of human assets. If blockchain could be fully integrated with the internet to form the Internet of Value in five or ten years, it is possible that everyone in the next generation will have his or her own digital assets. Just like everyone needs his or her own browser, people may need their own crypto wallets in the future. As the foundation of the Internet of Value, crypto wallet opens up many possibilities.”
At present, exchanges and crypto wallets are profitable markets. With more crypto wallet products entering the market, there are also speculations that a built-in crypto wallet might be possible and even replace existing exchanges. In terms of whether crypto wallet can replace the exchange, Jiang said:
“90 percent of people who own digital currency merely open an account on the exchange. They have no crypto wallet, but this pattern will certainly change in the future. It is possible that in two to three years, a number of people will not use exchanges anymore and only rely on crypto wallets. Although the application scenario of digital currency only exists in business transactions at this moment, once the digital currency becomes a form of payment in real life, an ecology built on crypto wallet will bring new experiences and make our lives more convenient, just as what Alipay has done.”
This conclusion is based on two points. From the perspective of asset security, the exchange has been criticized for centralized operations. When attacks happen, the users’ assets cannot be recovered. The crypto wallet is a safer choice. On the one hand, with the expansion of the digital asset market, the increasing awareness of users, and the faster transaction speed, it becomes easier for users to make transactions directly using the crypto wallet. As it becomes more common to use the crypto wallet, it is possible that crypto wallet will surpass the exchange to become the major user portal.
Crypto wallet is not only a product, what other possibilities will it bring?
“The blockchain technology is still at an early stage and the entire market is not clear except for Bitcoin. Yet, compared to the traditional entrepreneurial field, blockchain is far more likely to create a company in a short period that is worth billions of dollars,” said Yan Jingsi, investment partner of Cobo and managing director of the Danhua Capital. “The investment logic of VC is to select an industry that has exponential growth, and crypto wallet definitely has the potential for exponential growth. Cobo supports the win-win mechanism to enable the large-scale application of crypto wallet in the future, creates new opportunities for digital asset holders, and has greatly improved the security level of the POS industry.
“Digital currency, represented by bitcoin, has functions such as value storage and transfer. The crypto wallet is the most important, cutting-edge, and user-friendly part of the digital asset. Hence, the entrepreneurial opportunity is also the biggest here,” said Zhu Yizhou of Ruifeng Capital. “The application of blockchain technology leans towards finance and crypto wallet is an extremely important segment. The market is extremely expansive and has a large market value of 100 billion.”
Unlike other crypto wallet products, Cobo Wallet has many interesting features besides the wallet itself. For instance, it has the online DApp app store, which supports the one-click participation of users in DApp games. Cobo, as a basic service provider, allows users a multi-functional platform than just a simple product. In the future, more applications such as DApp and wealth management will use the crypto wallet as a portal to interact with users.
In the past year or two, we have experienced the growth and potential of digital currency as a new asset type. Yet, compared with other asset types, the scale of digital currency is not worth mentioning. The global stock market is worth $73 trillion, the value of gold that has been mined is $7.7 trillion globally, yet the digital currency is only worth $0.2 trillion. The Cobo Wallet, however, has opened many opportunities and challenged the existing cryptocurrency ecosystem. “The basic financial tools and services in the digital currency industry were almost non-existent. Now it’s just getting started,” Jiang said.
Feature Image From Cobo Official Medium.