There’s no denying that the Web3 industry is slowly becoming mainstream. Cryptocurrencies, blockchain, NFTs, DeFi, and the metaverse have become household terms, and millions of people are expected to enter the crypto market in the coming year.
However, the rate of adoption Web3 has seen isn’t as fast as one might think. There’s a significant discrepancy between the adoption rate of Web3 technologies within the crypto industry and outside of it.
While the crypto-savvy audience has followed the industry since its inception and knows its way around it, the more mainstream audience often has a hard time keeping up with new developments.
The curious case of the hardware gap
Many different factors contribute to this discrepancy. Ruben Merre, the founder and CEO of NGRAVE, believes that one of the biggest factors delaying Web3 adoption is a lack of hardware technology that allows users to physically interact with and experience Web3.
“We still haven’t reached a place where the ease of usage of Web3-related hardware is what the population is used to under the current Web2 structures,” he said in an interview with CryptoSlate. “This is something the industry needs to strive towards.”
Merre says that the decentralization that comes with Web3 has forced individuals to become responsible for taking their online security into their own hands. Removing that responsibility from third parties and proxies has resulted in many security solutions catering only to advanced customers, leaving those less tech-savvy behind.
“While Web3 has grown and provided some benefits to users in terms of security, this remains a huge hurdle to Web3 adoption – in particular, because many of the hardware solutions which have been available up to this point are difficult to use,” he explained. “Generally speaking, there’s massive room for improvement in terms of the technology that allows you to physically interact with and experience Web3.”
The problem Merre described is often referred to as the “hardware gap” in the Web3 industry. The new tech era has been disproportionately more focused on developing software, with the hardware that needs to accompany it looking more like an afterthought than a deliberate solution.
When asked whether he thought that the hardware gap was slowing down the industry’s adoption, he said that it was definitely the case.
“I think that at the moment, Web3 is still quite an intimidating concept to most people and the experiences that are to be had with existing hardware are not yet fully fluid.”
His company, NGRAVE, specializes in hardware manufacturing—cryptocurrency wallets, to be exact. NGRAVE’s products are touted as one of the most secure on the market, providing users with an end-to-end solution to manage their crypto safely. The company is actively addressing the problem of the hardware gap by providing users with the hardware tools necessary to secure their crypto assets—whether these are cryptocurrencies, NFTs, or even their digital identities.
Merre believes that NGRAVE needs to focus on education alongside manufacturing to secure its place on the market.
“To facilitate this change and further encourage Web3 adoption, it’s imperative that there’s not only a focus on providing hardware that facilitates good user experience, but also on educating individuals on how to use and get the most out of this technology. This is definitely something we’re prioritizing at NGRAVE.”
The importance of education becomes even greater when looking at the speed at which specific segments of the Web3 industries are developing.
Take, for example, the metaverse. The massive rise in popularity it saw in the past year has fast-tracked the lives of millions into the digital realm. And with the entirety of the metaverse happening on the blockchain, there’s a pressing need for the security and protection that hardware solutions can only offer.
Merre expects that the increased usage of the metaverse will lead to an increased interest in NGRAVE and its products. Educated users will be the ones that value security and reach for hardware solutions to protect their assets.
However, this doesn’t mean that companies like NGRAVE will close the hardware gap any time soon.
“Hardware is hard.”
Last month, Warren Buffett’s Berkshire Hathaway acquired a $4.2 billion stake in HP—and saw it increase in value by over $650 million in a matter of days. This has led many analysts to seriously reevaluate the “hardware gap” and warn about the potential implications of a hardware shortage in the future.
Merre somewhat agrees with this outlook, telling CryptoSlate that there has been an increased demand for hardware following the massive shift to working from home and hybrid working in the wake of the COVID-19 pandemic. This has resulted in supply decreases, which have significantly affected the prices of hardware and the crypto industry’s ability to deliver products.
This problem isn’t exclusive to the crypto industry, either. In 2020, Sundar Pichai, the CEO of Alphabet, said that Google was facing severe issues with its hardware manufacturing, particularly its Pixel phone. He told The Verge that hardware manufacturing was a multi-tiered, costly process that was both labor and cost-intensive.
“Hardware is hard,” he said at the time.
This isn’t a new problem, either. Wired identified issues with hardware manufacturing as one of the biggest reasons startups failed—almost five years ago.
Even if companies manage to identify the type of hardware their customers need, the demand for a particular product might decrease significantly when it hits the market. This lag in time can also cause the end price of the product to spike, impacting its market fit.
Nonetheless, the rise in interest in hardware products, especially cryptocurrency wallets like the ones offered by NGRAVE, is at its peak. A growing demand for secure hardware, coupled with the increasing liquidity of its prospective customers, means that companies like NGRAVE will keep fighting to bring more products to market. We are yet to see whether NGRAVE and others can overcome these challenges and deliver the hardware the industry so desperately needs.
Because better and easier to use hardware products will ultimately bring more adoption to Web3, Merre said.