Web3 wallets: The digital payment solution for the next billion users

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The rapid integration of digital payments has positioned web3 wallets as a central component of today’s financial ecosystem. In light of Thailand’s $13 billion digital wallet initiative, the question of how to create secure and scalable web3 wallets has become more urgent than ever. Are current web3 wallets really ready for mass adoption and what are the ways to overcome some of the most significant challenges in the space?

Expanding wallet use cases

Web3 wallets, often considered gateways to the decentralized world, are evolving rapidly. Initially, the main use cases revolved around the storage and transfer of cryptocurrencies. But their usefulness now extends far beyond that. Non-custodial wallets are transforming the concept of ownership and control, allowing users to directly manage their digital assets, tokens, and even NFTs. These are becoming indispensable for governance voting in DeFi, iGaming, and even DAOs.

As these use cases expand, adoption of web3 wallets also increases. Bitget Wallet’s rapid growth may also be a good indicator of this trend. A key factor in this growth was Bitget Wallet’s web2 integrations, which increased its monthly active users to 12 million, and tap-to-win games, which applied wallet features directly to engaging mobile games, attracting a wide audience. This has proven to be a key driver of adoption, especially for regions where traditional financing is limited.

Difficulties of adoption

With growth, web3 wallets face significant hurdles to mass adoption. One of the most obvious challenges is security. A recent CertiK report revealed that security incidents due to wallet exploits amounted to more than $1.84 billion. While non-custodial wallets offer advanced control, they also place the security burden directly on users. It presents a high-risk scenario, especially for those who are not technically savvy.

Application of keyless multi-party computing technology is one way to solve these problems. The upgrade eliminates the storage of private keys on any device or server, significantly reducing the risk of hacking. MPC distributes control of private keys to multiple parties, providing a robust layer of security without sacrificing convenience.

Another feature that directly addresses security concerns is the self-storage model. Users gain full control over their private keys, ensuring that they, not third parties, are responsible for their assets. This self-storage feature is critical to empowering users as it reduces dependency on hack-prone intermediaries and centralized custody services. Users can trust that their assets are completely under their control, increasing both security and user confidence.

Additionally, the inclusion of established web2 platforms such as Telegram for user engagement demonstrates an innovative strategy to bridge the gap between web2 and web3. This type of integration lowers the barriers to entry, making it easier for new users to transition into the DeFi world without the need for a comprehensive understanding of the intricacies behind blockchain technology.

While rapidly scaling to meet growing demand, wallets need to ensure their security measures remain robust, especially as digital payments gain worldwide traction. Ease of use and security often exist in balance. Wallets that prioritize user-friendliness may run the risk of cutting corners on security. On the other hand, more secure wallets often require a certain level of technical expertise, which can hinder the adoption of mainstream wallets. Striking a balance between these two factors is critical to the long-term success of web3 wallets.

What’s next?

Looking ahead, the future of web3 wallets will depend on their ability to continue to evolve in line with broader adoption of digital assets and payments. Web3 wallets will need to be both scalable and secure to meet the needs of a diverse global audience. The path forward will likely include broader adoption of MPC technology as well as further innovations in security, including efforts to make web3 wallets more accessible to non-crypto users.

Alvin Blood

Alvin Kan is Bitget Wallet’s chief operating officer, leading the company’s global growth strategy and overseeing branding, operations and growth initiatives. Prior to this role, Alvin worked at LinkedIn for nearly a decade, leading the data team in the Asia-Pacific region and contributing to strategic planning for the company’s expansion in Asia. He later served as chief growth officer of the BNB Chain ecosystem and head of Asia at Sei Labs, gaining extensive experience in market growth and data analysis in the web2 and web3 domains. With years of rich technical expertise and strong visionary leadership, Alvin is dedicated to building web3 and exploring new frontiers.