As the calendar flips to 2025, the world of cryptocurrency finds itself at a pivotal juncture, confronted by a number of pressing inquiries that transcend the usual discourse around market values and regulatory frameworks. At the heart of the matter lies the technological infrastructure that underpins the array of applications currently dominating the sector—a foundation that is on the cusp of significant evolution in the coming year, promising ramifications that could extend deeply into the user experience.
In our latest installment of the annual Crypto Crystal Ball series, we delve deeply into the narrative currents that are poised to sculpt the crypto landscape over the next twelve months, focusing on their potential impacts on stakeholders across the spectrum.
One of the compelling stories we’re tracking with keen interest pertains to the degree of political capital former President Donald Trump might be prepared to invest in advocating for the crypto industry’s top priorities. Yet, perhaps even more transformative could be the anticipated technical advancements to Ethereum that herald the possibility of cryptocurrency achieving mainstream acceptance among consumers.
For what seems like an eternity, the crypto community has been eagerly anticipating the dawn of widespread adoption. Despite this yearning, blockchain-based products and experiences have consistently struggled to attract user bases that rival their conventional Web2 counterparts.
This narrative, however, may be set for a dramatic shift come February, courtesy of a crucial update to Ethereum that promises to drastically enhance the usability of on-chain applications for the average consumer.
David Silverman, the Senior Vice President of Strategic Business Initiatives at Ethereum scaling project Polygon, reflected on the 2021 bull market in crypto as a period marked by burgeoning interest from millions in exploring on-chain applications—a potential that was curtailed by the technological limitations of the time. Silverman is optimistic that the anticipated bull cycle of 2025 will showcase the true potential of crypto products, offering users a glimpse into the envisioned future of Web3, rather than mere fleeting instances of what could be.
According to developers, the forthcoming Pectra upgrade to Ethereum is poised to dismantle the barriers that have previously rendered on-chain apps cumbersome, ranging from prohibitive gas fees to the necessity for specialized wallets to interact with smart contracts. The promise of transaction authentication via universally accessible mechanisms such as Apple’s FaceID, coupled with the capacity to navigate certain on-chain apps sans transaction signatures, suggests a future where the on-chain experience aligns more closely with the seamless interaction users have come to expect from traditional applications.
A particular breakthrough associated with the Pectra update is its enhancement of standard wallets—like those provided by industry stalwarts Coinbase and MetaMask—to facilitate gas payments on Ethereum and its layer 2 solutions using any cryptocurrency, including stablecoins. This, in addition to enabling transaction authentication via biosecurity features such as FaceID and TouchID, markedly simplifies the user’s interactive process.
Mark Tyneway, Co-founder of the Ethereum layer-2 network Optimism, points to the innovation of session keys as a game changer, enabling users to engage in extensive on-chain activities without the constant awareness of the underlying processes—a leap forward that could substantially redefine the user experience.
The implications of Pectra’s advancements are vast, according to Polygon’s Silverman, who envisions a future where crypto app developers can offer user experiences mirroring those of leading Web2 apps, albeit with the unique advantages inherent to Web3. This paradigm shift, Silverman contends, signifies a critical turning point in the journey towards superior crypto user experiences.
As we voyage into the future, standing on the precipice of these technological advancements, the potential for a fundamental transformation in how users interact with and perceive the crypto space looms large, setting the stage for a chapter in the ongoing evolution of digital finance.