New Huobi research has revealed that the number of crypto wallet users worldwide grew by 6.3% to 85 million as of November 2022.
The report said non-self-custodial wallets could potentially introduce Web2 users to Web3. It noted that these wallets could do this because they have simplified the onboarding process and the complexity attached to the crypto industry.
Huobi wrote that wallets have become “a must-have for new users to enter the crypto world.” According to the firm, it is one of the most critical infrastructures in the blockchain ecosystem.
Meanwhile, crypto wallets generated total revenue of $1.398 billion in 2022. The earnings are expected to cross $3 billion within the next decade.
2022 was the Year of Crypto Wallets
Crypto wallet usage came to the fore during the recent FTX implosion, where several analysts highlighted the importance of self-custody.
Several crypto hardware wallets like Trezor and Ledger reported a surge in demand due to the FTX contagion. During the height of the run, reports revealed that roughly 15 million Bitcoin went into self-custody.
Binance-backed Trust Wallet also saw an increase in its use as CEO Changpeng ‘CZ’ Zhao shilled the importance of self-custody. According to CZ, self-custody is a fundamental human right.
Challenges Still Abound
Despite the successes in the space in 2022, the ecosystem still faces several challenges.
Huobi highlighted crypto wallets’ three main challenges: user-friendliness, security, privacy, and regulation.
According to Huobi, most wallet brands have poor interaction with their users. Besides, discussions surrounding privacy invasion were raised when ConsenSys (MetaMask and Infura’s parent company) revealed it would collect users’ IP and ETH addresses.
Meanwhile, CZ recently cautioned that around 99% of people trying to self-custody their assets would lose them. He argued that these people might not store their security keys securely or even back them up correctly.
He added that there are other challenges self-custody poses to users that a centralized exchange might be able to solve.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.