Is Solana Leading Crypto Into Retail or Trailing Apple?
The Solana blockchain is opening an embassy in New York City. Not like a United Nations embassy with ambassadors and diplomats and flags, but a storefront that seemingly doesn't plan to sell much of anything.
Solana Spaces, located in the high-end Hudson Yards real estate development on Manhattan's West Side, is a "culture center." It's a place where the Solana Foundation imagines people will go to hang out and get educated about crypto.
"Inside, you'll learn how Solana works, what Web3 is. We'll set you up with a wallet and your first [non-fungible tokens] and guide you through your first on-chain transactions," reads a promo from the Solana Spaces Twitter account.
The Space is clearly modeled on the sleek, modern design of Apple Stores – those sales-cum-tech centers that radically transformed Apple (AAPL) into a retail powerhouse when they opened in 2001.
There's incredibly bright track lighting, white walls, white benches, a white ceiling. Every angle is clean and every curve soft.
Steve Jobs once said the minimalism of Apple Stores was meant to demonstrate his singular focus on design. He wanted his products to look good and be intuitive to use. It's not a stretch of the imagination to say Solana is taking cues from that tech legend.
Last month, there was news of a "Solana Phone." Anatoly Yakovenko, co-founder of Solana and a former Qualcomm engineer, said the network's smartphone was a way to bring crypto into the world of mobile computing. And maybe, just as the iPhone rapidly expanded internet use, a SOL Phone could bring people into crypto.
The SOL Phone would essentially function as a hardware crypto wallet. It would also have a developer's stack that would make it easier to build, deploy and download crypto apps. This is essential, considering the roadblocks Apple has put in place for blockchain projects to access its App Store.
"All the stuff that is magical about crypto … all depends on self custody," Yakovenko said in an interview on CoinDesk TV's "First Mover" program. But there's a major catch. The "user experience around self custody is horrible," he said. He's right.
Solana is staking out interesting ground in attempting to be a retail-friendly tech stack. It's following a route that worked for at least one conglomerate, but at which countless others have tried and failed.
It'd be easy to criticize the Solana Foundation for striking out in flailing directions, while its core product – the actual crypto network – routinely suffers outages. But if they have money to burn, both a phone and an "embassy" are worth betting on.
Solana, invented as an Ethereum killer, is still trailing that blockchain by most metrics. It has fewer node operators, fewer holders, a smaller market cap. And so if it hasn't differentiated itself on software (at a time when Ethereum is rebuilding itself to be more user friendly) maybe it can with hardware and a physical footprint.
Some Ethereum stans said the Solana Space was a sign of the network's centralization. Like other blockchains launched after Bitcoin, Solana took venture capital funding and started a non-profit entity that largely directs the chain's development.
These efforts actually seem in line with the "brand" that Solana's founders are attempting to sell. Solana distinguished itself on the idea of scalability and affordability. For a while, they rejected the term "blockchain" in part because of the clunky and expensive associations that term carried.
Although there's a difference between the entity building Solana and the network itself, I'm curious what Gary Gensler, top cop at the U.S. Securities and Exchange Commission, would say about the "expected profit" from the "common effort" of building and marketing phones and a retail footprint.
It's also worth wondering what the long-term plan is, and what it would mean for the crypto industry if other network's got into the retail game. Would the Algorand people hang its shingle across the mall like Microsoft (MSFT) trailing Apple?
Not to be pessimistic, but it's hard to see how the world would be meaningfully different if, say, every other person carried a SOL Phone in their pocket.
In interviews, Yakovenko often brought up the idea of how the SOL Phone, with Solana Pay built in, would make it easier to "buy a cup of coffee" with crypto. Are we actually heading towards a world where everyone uses one or dozens or hundreds of private, algorithmic currencies? Maybe if the U.S. dollar actually implodes.
Payments were bitcoin's first failed use case. Beyond the tech that made transactions slow and expensive, few people wanted to pay capital gains as well as sales tax. There have been improvements to the tech and the law can change. Maybe micropayments will catch on. People today do use Lightning and Phantom, and perhaps it'd be nice to have the option – but Apple Pay works fine.
Yakovenko, like many of his peers, discusses crypto as a platform for open innovation. The Solana Phone is an advancement because it would be ungated.
Apple's place in the history of computing follows the trend towards smaller and more powerful computers. Its success in the 1980s was betting on the legitimacy of personal computing – at a time when building-sized mainframes were fresh memories. Then came the iPhone.
It's still unclear exactly where crypto fits into the computing revolution. It's all the more confusing because crypto sold itself as an antagonist of Big Tech, and now Solana is following its designs.
– D.K.
