The idea of onboarding the “next billion users” to Ethereum has become a rallying cry for the community. It’s bold. It’s inspiring. And for most projects, it’s utterly disconnected from reality. 

You might ask, “Why?”.

Doesn’t targeting big markets and expanding beyond our crypto bubble make sense?

At the end of the day, going after 1,000,000,000 users just reflects the size of the market you’re after. So, instead of building a product for, e.g., the collectibles market, you go after payments or ticketing because more people use these. So if you win, you win big, and both you and the VC signing your checks are happy.

So where’s the problem?

Let’s start with the facts.

There are a few apps that reached 1 billion users, and we all know these names:
Facebook, TikTok, Instagram, WeChat, Microsoft Office, YouTube, Google, Google Chrome, Google Maps, Gmail, and so on. 

Every single one of them targeted a mainstream problem and delivered a 10X better solution with the support of world-class distribution. 

Some of the initial distribution was primarily viral (Facebook), some was via partnerships (Google being a search engine on Yahoo), some via upselling other products (Google Maps), or huge on-the-ground salesforce (Microsoft Office).

When you step back and look at these apps, one thing becomes clear: they became really successful when the underlying technology had already been adopted.

Microsoft Office was announced in 1988 when IBM PC sales were over 10,000,000 per year.

Google started in 1998 when 26% of all Americans had the Internet at home (and probably more at work):

Instagram started in 2010 when over 20% of the US population had smartphones:

And Bezos has a similar story.

"In 1994 I started Amazon.

All of the heavy lifting infrastructure needed for Amazon to exist was already in place.

We did not have to build a transportation system to deliver packages, it existed already. If we had had to build that it would have been billions of dollars in capital. But it was there, it was called the US Postal Service and Deutsche Post and Royal Mail and UPS and FedEx. We got to stand on top of that infrastructure.

The same thing with payment system. If we had to invent a payment system and roll that out that would have been billions of dollars and many decades. But no, it already existed it was called the credit card.

Did we have to deploy computers? No, they were already in most home. Mostly to play games but they were there, that infrastructure already existed.

If we have to build a telecom network that would have been billions of dollars, but we didn't. It was in place mostly to make long-distance phone calls and built by global telecom carriers like AT&T and their equivalents around the world.

Infrastructure lets entrepreneurs do amazing things"

So, is Ethereum ready for the launch of a "1B users product"?

According to crypto.com research, there are 136 million global ETH owners.

But how many of them made a transaction on Uniswap, bought an NFT on OpenSea, or borrowed money from Aave? When I look at my non-crypto friends, most have ETH on Robinhood, Revolut, or Coinbase but never even made an onchain tx.

And it’s not surprising - according to Etherscan, there are only about 500k daily active ethereum addresses. Even if we add L2s, this number is not too big. And to calculate how many people actually use Ethereum, we'd have to exclude those with multiple addresses, bots, etc.

Of course, most people don't transact daily, and you can, e.g., use Farcaster or Kiwi without doing any onchain tx, but it shows that we are probably not at the “20% of all Americans are active onchain” level.

So if we aren’t at the stage where we have enough technology adoption, should we just wait until ‘devs do something’? 

Thankfully not.

If the history of tech teaches us anything, it’s that adoption is driven by killer apps. And it’s “apps,” not “app". There are typically many of them.

These killer apps provide something users really need and they can be used only with a particular type of technology. We had to buy a PC to play Wolfenstein 3D, we had to get a modem to send an e-mail, and buy a smartphone to use Google Maps. 

Here’s an example of VisiCalc that made Apple computers popular:

“Financial modeling spreadsheet.” 

Does it sound like a “billion users app”? Not really. 

But it was enough to drive tens of thousands of people to Apple computers. And once these users were in the Apple ecosystem, devs who shipped Apple computer apps could reach these new potential clients. And they built other apps that onboarded new users, like Aldus PageMaker focused on the publishing industry.

That created a virtuous circle where every new successful app made some new people want to buy Apple computers. Same with iPhones.

Here’s a piece from my 2021 essay, "Why it's hard to understand blockchains unless you see it as a new type of computer?":

"The iPhone case was a little bit different. Steve Jobs was very customer-oriented. So he made sure that the first iPhones had iTunes, Google Maps, e-mail, and a browser, to make the device useful for non-hacker users.

iPhone hasn’t been understood by journalists from TechCrunch, AdAge, Bloomberg, Guardian, and of course, Steve Ballmer, who famously said: “There’s no chance that the iPhone is going to get any significant market share.”

This pattern repeats itself with every new computing platform. That’s because it sometimes takes years until a few of the 1000s apps becomes a ‘killer app’ that makes the computer worth buying. (For me, in the 90s, this killer app for PC was video games. First Wolfenstein 3D, then Diablo.)"

So, first, iPhone apps onboarded some people, primarily geeks. Then new apps, like Instagram, Uber, or Tinder, catered to millions of existing Apple users and onboarded new users. I actually bought my first smartphone to use Uber - I lived in the suburbs, and taxis were super expensive.

Same with the Internet. First, it was e-mails. Then it was reading the websites. Then it was e-commerce. And then a million other things.

Early apps are much simpler than the late ones. That's also because the infrastructure is not ready yet for more complex use cases - you wouldn't be able to play Fortnite on iPhone 1 or use Salesforce on a 56kbps Internet. But these early, more narrow use cases push the boundaries of infrastructure that the late apps can take advantage of. In other words, apps force infrastructure to grow and adapt, as described in this USV blogpost.

Once these users join the ecosystem and get through the first onboarding hoops, they will be more open to trying other things.

This happened in the 2021 bull market when NBA Top Shots onboarded people who wanted a collectible sports card. It’s not a “billion users market,” but it was big enough to impact Ethereum. Once these people bought the first NBA NFT, they looked around and checked other collections.

Same with people who decided to play fantasy football on Sorare, bet on Polymarket, and just hold stablecoins in high-inflation countries like Argentina. They start with a narrow use case, and afterward, some explore Ethereum, buy NFTs, trade on DEXs, and join DAOs.

I think we win with 100s of narrow, extremely well-executed use cases, not with 1 mainstream use case.

There are also other advantages of this focus.

First, it’s a hundred times easier to build a 1M users app than a 1B users app. This is not only because, statistically, you have higher chances of success but also because by being laser-focused on their needs, you can create something uniquely delightful for this targeted group of users, just like Brian Chesky says in this clip.

"It’s better to have 100 customers that love you than a million customers that just sort of like you."

Paul Graham

Think about Apple and VisiCalc for a second. In 1979, some people paid $1,300 for a computer to use a computer program. That's $5,350 in 2024 dollars. Now, that's what we call building something people really want.

Also, if you decide to build a mainstream product from Day 1, it’s easy to fall victim to some version of the Tyranny of the Marginal User. This means your product gets blander because it needs to cater to more users - kind of like Pop music that’s “okay” but very seldom “amazing” because everyone needs to “kind of like it.”

And in blockchain, switching costs are lower than in web2, so you just can’t afford the luxury of enshittifying the product that Facebooks and YouTubes of the web2 world had.

Second, you don't need to think about infrastructure challenges that much.

As Recmo rightly pointed out in the debate, you must solve hard tech problems when building for 1B users. But most apps and infra don't need more scalability. They need more users.

It’s like building a 16-lane highway for a village - not really efficient.  Even if you decide to build infra for the next billion users, you’d go bankrupt because there’s not enough demand for a long time.

Here's a good comment from yuga on that subject:

Also, this space is moving fast.

In 2020, we didn't even know if these L2s would really work. Today, we have optimistic rollups, zk rollups, alt-DA layers, P2P networks, and so on. If you couldn't predict in 2020 that these options could help you scale your app, what makes you think in 2024 that you can predict what options we would have in 2028?

Third, UX becomes less of a problem.

Here's a quick story:

In 2021, my friend, who barely knew how to use his online bank, bought an NFT.

The process was as follows:
1. Create a Binance account
2. Send money to Revolut
3. Find on the Binance website the number of their Seychelles Binance bank account
4. Send money to the account
5. Buy ETH
6. Create a MetaMask wallet
7. Send money to a wallet
8. Connect the wallet to OpenSea to buy an NFT
9. Approve tx

They jumped through all these UX hoops to buy an NFT that would (hopefully) make 10X. The value they expected to get was much higher than the time investment they needed to make.

Of course, you should make the app’s UX as good as possible.

But - as I said before - UX is often a distraction. If people could buy a $1,300 Apple computer to use a product, they can make two extra clicks in your app. But only if you build something they really want.

In other words, focusing on UX when your app doesn't solve users' problems is like focusing on public speaking skills when you have nothing to say.

And when you actually have something interesting to say, people will listen, even if your speech is not perfect. Just like they coped with the 1995 Internet:

At the end of the day, the UX hurdle is the delta between the value users get from the app and the time/energy/money investment they have to make.

You can work on lowering the investment by improving the UX (and that's also necessary), but you can also work on increasing the value they get from the app.

So, by focusing on the next 100k-10M users, you will probably build a better product, won't need to care that much about infra, and can get away with imperfect UX. And if you succeed with 10M users, in many cases you can scale horizontally and try to reach 20M, 50M, 100M and maybe one day 1B users.

So, to sum up, I think the best way to onboard the next billion to crypto is to give them something they really want but can’t do elsewhere.

That’s why ‘banking the unbanked’ works.

That’s why DeFi works.

That’s why NFTs for digital artists work.

And if we do it via 100s of extremely well-targeted apps, we will eventually grow the user base to 1 billion.

Thanks for coming to my TED Talk.

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