The following article was written by Professors Kartik Hosanagar and Myriam Brouard. Hosanagar (@khosanagar) is a Wharton professor of operations, information, and decisions and co-director of the AI ​​for Business faculty. He is also the author of A human guide to artificial intelligence. Brouard (@professorNFT) is an assistant professor studying the intersection of technology adoption and consumer culture at the University of Ottawa’s Telfer School of Management.

Next, they discuss the biggest problem facing Web 3.0, or “Web3,” the next evolution of the World Wide Web that focuses on decentralization, artificial intelligence, and blockchain technologies.

Crypto and Web3 have a problem. No, not the recent drop in the value of Bitcoin, the collapse of the “stablecoin” Terra (LUNA), the fact that the first projects offered little utility and were mostly driven by asset speculation for part of a small but noisy community, or even widespread fraud accounts. This issue is of equal or greater concern, one that will survive market fluctuations and a lack of proper regulation. It’s just that, for a product meant to democratize everything from investing to activism to art, Web3, the universe of blockchain, non-fungible tokens (NFTs), and cryptocurrency, is devilishly hard to use.

“Getting and spending we waste our hours,” Wordsworth wrote in his poetic critique of capitalism. With cryptocurrencies, it is not the acquisition that takes time or requires technical knowledge. Part of their appeal, in fact, is how easy they are to buy. Buying Bitcoin or Ethereum is as simple as setting up an account on one of the many registered exchanges and linking it to a credit card (or source of funds).

It’s spending that has taken up embarrassing amounts of our time in the last two years, and one that we believe represents a real limit on how these innovations can change the world. Initially, the problem with Crypto was the inability to spend it on anything other than illicit purchases on websites like Silk Road. That all changed with the emergence of NFTs and decentralized autonomous organizations that allow users to buy digital art, invest in musicians in exchange for a share of their royalties, or join clubs that give them access to IRL (in real life) activities like concerts. or networking events. But participating in these projects, or operating within Web3 in general, requires you to be able to understand and act on smart contracts written in code, often in seconds.

We’ve both worked in technology for decades, and one of us is fluent in the programming languages ​​used in the cryptoverse. However, even we have found the simple process of interacting with smart contracts and investing in a Web3 project with funds held in a crypto wallet difficult and tedious.

Sometimes it can take days to figure out how to invest early in an NFT you’re excited about, or claim a reward for a contribution you made to someone else’s project. The problem is that some NFT projects may not have a website, which means you have to search Twitter for details of what’s on offer and how to buy it. There can be different sets of instructions, complicated by conflicting advice from people on Discord, the main platform for Web3 conversations. Some of the advice is well-intentioned but wrong, and some is evil.

To complete a transaction to buy an NFT, you typically need to connect your crypto wallet to a site that will interact with the smart contract and ask you to sign a transaction. Often the transaction text is composed in a way that is difficult for users to understand and does not clearly express what the transaction is requesting. This leads users to sign transactions that could give malicious contracts the rights to empty their cryptocurrency wallet and assets.

One of us, Kartik, had tried to acquire an NFT from a project dedicated to attracting more women to Web3. Unfortunately, the project was very popular and he was unable to get one of the few NFTs available. Later, a direct message arrived about a recently released NFT set. Distracted by a phone call, Kartik followed the link, unaware that he had been taken to a copycat site. Still on the call, he bought the NFT. Although he realized his mistake in a matter of seconds, it was already too late: he had been defrauded of about $350. But it could have been worse: at the bottom of the code of the contract he had signed, there could be permission to do more than transfer a few hundred dollars; I could have emptied his crypto wallet.

It is true that FOMO (fear of missing out) was partly to blame. If Kartik had waited for the call to end, read the contract carefully, and double-checked with an expert who had understood it correctly, he might have caught the scam, but he would also have missed out on being part of a coveted project.

Similarly, Myriam wanted to acquire a free NFT from a project that had a lot of publicity. With such projects, one must be quick to secure the NFT. When time is tight, you don’t have the opportunity to perform the due diligence that is often required before interacting with smart contracts. To mitigate this risk, Myriam has what she calls a disposable crypto wallet, set up with very little funds, which she uses to interact with websites and contracts she doesn’t trust. This technique is used to avoid what happened to Kartik above. Despite the NFT being free and the wallet disposable, the project needed users to directly interact with the contract. The many layers required to get the free NFT made Myriam unsuccessful. The same NFTs were later sold on the secondary market for a hefty premium.

FOMO or the need to make split second decisions is not the sole province of Web3. But the people who battled for Gap’s Kanye West puffer jacket last winter didn’t risk losing hundreds of thousands of dollars by accidentally walking into a similar store that’s also called Gap and is designed to look exactly like the original store. And fraud in the real world or on the Internet—Chinatown impersonators or email scammers—generally doesn’t require a computer science degree to spot.

What solutions could lead to a safer Web3 experience?

Most cryptocurrency enthusiasts want better protections against scammers and other morally dubious actors. So yes, bring regulatory clarity. But also bring in the user experience designers and usability engineers. Here are some steps that could be taken at the hardware, application, and community levels to make the space more hospitable.

• Design a more complete user experience. The fact that transaction requests are unintelligible to most users creates an obvious barrier to adoption and an easy way to be tricked. Using simple texts to demystify the transactions would be very helpful. What funds are moving? In what direction? What specific permissions does the user grant when signing a transaction?
• Flag dangerous transactions. Crypto wallets can offer timely information about the potentially malicious nature of the contracts that users interact with. They can allow users to rate a transaction or counterparty, track whether other users have flagged a contract or counterparty as fraudulent, and display warnings to users before they sign the contract.
• Provide educational resources. The NFT space is decentralized and self-custody is a constituent element of Web3. This is a major change from Web 2.0. Educational resources will help safely onboard more users into the space.

Web3 may well become the new paradigm, but we don’t see it happening unless the community first addresses the usability and security challenges that currently plague this space.