Since the cryptocurrency market and the blockchain industry is currently at the downtrend even most devoted Bitcoin fans start asking questions. With all the challenges that blockchain technology now faces, is there a chance for mass adoption? What future awaits Bitcoin, Ethereum, ICOs, and the whole industry?
In the world of IT, there have already been some similar trends in the past. So let us take a closer look at them and draw the most probable scenarios of blockchain’s further implementation.
Reasons for the industry downtrend
After the impressive growth of Bitcoin and all other cryptocurrencies in 2017, the current state of the market looks less than great. The overall market capitalization has dropped from its historical maximum of 830+ billion USD in January to somewhere around 100 billion USD in December 2018. Ethereum, the most popular platform for ICOs, struggles to keep the price of its coin at the 100 USD level after skyrocketing to 1’400 USD in January.
Now, it’s also worth saying that ICOs are among the main culprits for the current crypto depression. More than 80% of all those projects turned out to be scams. Furthermore, scammers cause the next major problem for crypto industry: legal restrictions. After so many people have lost their money, authorities had nothing left to do but to ban cryptocurrencies – in part or altogether.
The obstacles to blockchain adoption
These flaws make life harder – not only for developers but also for users. Of course, we are talking about usual people here, as geeks may not see the following points as barriers.
- Transaction fees: This is a very serious psychological hurdle for a usual person. Why should I pay commission whenever I send funds to someone or just perform some actions within dApps?
- Complicated interface: Users are lazy, even when it comes to creating a secure password for every important online app. Asking them to copy-paste the hideous mix of digits and numbers that is called their crypto wallet is a utopia.
- Funds’ security: It’s too inconvenient to have to take care of your funds’ safety all by yourself. Better leave it all to banks for a small monthly fee.
- Convenience over technology: Decentralization, cryptography, censorship resistance – people don’t need technology for the sake of technology, especially if they have to give up conveniences provided by banks.
Similar situations have already happened in the IT industry in the past. The most prominent of them are RSS, free soft and torrents. Let’s take a closer look at these technologies and what happened to them.
RSS abbreviation stands for “really simple syndication.” This is a tool that helps you track the latest news of your favorite websites all in one place. First introduced by Netscape in 1999, it reached its peak of popularity somewhere at the end of ‘2000s when RSS button was a “must have” for all news websites.
But still, it hasn’t become a mass product.
As handy as it may sound, RSS had a number of flaws.
- When you clicked on a button, sometimes a code would unintendedly show up, which could confuse the reader.
- Text formatting was unpredictable making the content look strange at times.
- RSS put additional obstacles on content monetizing as it blocked ads that publishers were making money on.
- Eventually, Google Reader shut down in 2013, and the technology was forgotten, except for a small group of geeks.
Some of these points remind of the cryptocurrency situation quite a lot, but just how much similarity there is, is open for discussion.
The free software movement is rooted long ago in the ’80s when Richard Stallman launched the project aiming to create an operating system with open source code.
In 1991, Linux was released. And as PCs were gradually getting mass adoption during the following decade, the free software distributors have become a pain in the neck of commercial giants such as Microsoft. In 2004, Microsoft even initiated an anti-Linux campaign urging the users to share the free software disadvantages.
And now the news comes out about Microsoft purchasing GitHub, the platform for developers sharing their open-source products with the public.
Open-source software hasn’t gained much popularity among the general public. Omnipresent Windows and sexy iOS interface appeal to them more though both come with certain costs. But Linux has taken over commercial platforms in all other areas. It is running on almost all top 500 supercomputers, and both Android and iOS are based on Linux.
Free software hasn’t fully triumphed, but it has penetrated into all IT areas.
The same fate may await blockchain as well. It may be abandoned by end users but implemented by banks to provide faster transactions (via Ripple, for example) with lower fees. Additionally, it could be done to make the banks’ actions more transparent.
Decentralized file-sharing websites
The most popular of decentralized file-sharing websites is BitTorrent. Websites like this appeared in the mid of ‘2000s when the Internet was already available to the broad audience. Pirates made use of the uncontrollable nature of the world wide web and were eagerly distributing software, movies, music, etc. The governments were trying to fight with them, but with no success because there was no technical capability to block torrents fully. For every blocked torrent website a dozen new ones emerged.
Now 13 years later the pirate parties are in parliaments of many countries standing up for freedom of information. And torrents are not needed anymore. You can watch your favorite movies online with much more convenience for a small fee or even for free (with an adblocker switched on).
Now let’s compare torrents to cryptocurrencies. This is a new half-legal technology that governments try to block. Commercials see the demand and meet the market requirements by integrating the solution into their business models.
So what about blockchain technology?
The high demand for Bitcoin in 2017 is a signal for businesses. People are ready to make use of blockchain technology even in spite of all the obstacles preventing it from mass adoption.
The point is that the world doesn’t need a beautiful technology for the sake of technology. It needs a solution to solve specific problems: send funds abroad instantly, decrease or fully eliminate transaction fees, get out of the ever-seeing eye of the central banks. Businesses can make money by providing such a solution to users.
It’s not yet clear yet how blockchain technology can get to mass adoption, though. It’s difficult for them to go viral due to the complexity of the interface and other obstacles that we’ve reviewed above. Not all users need privacy (altcoins such as Zcash and Monero). But the availability of such a technology is an ace in the hole which helps to strengthen our positions.
The wheel is set in motion. Many universities now launch blockchain courses, different countries launch their own national digital currencies, serious journals post articles about blockchain technologies.
There is interest towards blockchain at the high level, so there will be attempts to implement it officially for sure. There are still many issues, but since the technology is being vigorously developed these issues will be resolved sooner or later.