How Will Blockchain Reach Mass Adoption?
How Will Blockchain Reach Mass Adoption?
The distributed ledger technology (DLT) — the underlying DNA of cryptocurrencies — has the same transformative power as the internet had in the early 1990s, says Morpheus Network co-founder and CEO Dan Weinberger. Experts agree with Weinberger that the blockchain’s present uncertainty and high volatility can be compared to the internet’s state during the 90s. This means that the blockchain’s complicated processes make mass adoption difficult to execute.
Just like how underrated the internet was during its early years, nobody can accurately predict blockchain’s impact on the world, but still, everyone wants to study the technology and when it will hit mass adoption.
For the mass adoption to happen, there are a few stages that must take place. From awareness to institutional adoption, everything must be seamless to be able to hit the tipping point where users will no longer have to deal with the difficulties when transacting with the technology. Here is a breakdown on what should happen for blockchain to reach mass adoption.
More fiat to crypto on-ramps
Changing the legal tender from fiat (real-world assets) to cryptocurrencies requires an intermediary from a centralized entity, and going through Anti-Money Laundering (AML) and knowing your customer (KYC) can lead to significant drop in prices.
The decentralization of cryptocurrencies is not necessarily an effort to protect consumers from dubious investments or credit card debts. Banks have been defensive when talking about cryptocurrencies, as they are trying to build one around themselves. This has made it more difficult for early innovators to bridge fiat and cryptocurrencies and to find trusted custody partners.
As blockchain continues to grow, reports of fraudulent initial coin offerings (ICO) companies have also increased. Such reports make people skeptical of blockchain-related startups. Even though blockchain is built on the core principles of freedom and autonomy, proper regulation can accelerate mass adoption and build trust with the masses.
The industry needs a common standard to allow more accessibility to the digital space, especially to the unbanked. Regulation will facilitate mass education and the development of regulatory frameworks in major countries, which brings together world markets. At the moment, regulating the blockchain is now in progress in the U.S. as 17 states have already passed bills related to its adoption in the real-world economy.
But users in the said states might wait longer for the blockchains mass adoption since the existing regulations do not cover the most significant feature of DeFi apps, smart contracts.
The learning curve for cryptocurrency is particularly steep, which is why most of the population still has no knowledge of how it works. Learning the ways of cryptocurrency and blockchain seem like an abstract concept that is almost impossible to grasp. The fear of not being able to fully understand how cryptocurrencies work is a huge factor for people who seek to explore the industry.
Education is a critical stage that must be addressed to achieve mass adoption of blockchain. It will help the underprivileged a lot if more crypto enthusiasts or experts conduct such initiative.
The use of stablecoins
It is clear that we are now heading towards the age of privatizing money, and the best asset one can maximize is the hybrid of real-world and crypto money called stablecoins. A stablecoin is a type of cryptocurrency whose value is pegged to another asset class, such as the U.S. dollar or gold, to stabilize its price and is backed by a reserve asset.
Stablecoins can be the solution to the 1.7 billion people who don’t have access to banking institutions. The product will surely appeal to the masses since it allows them to earn the interests of crypto while enjoying the stability of fiat currencies.
Ease of use with speed
The current process of buying or selling cryptocurrencies requires having a wallet and going through a list of complicated steps just to complete a transaction. Decentralized applications have processes that are quite complicated for the not-so-crypto-savvy people compared to straightforward cross-border payment channels (e.g. PayPal, Revolut).
Another significant issue in blockchains mass adoption goal is the high barrier to entry, even for developers looking to create new blockchain-based applications. Furthermore, the current blockchain transactional speeds are slow — Ethereum, for instance, can only handle 15 transactions per second (TPS), while Bitcoin can only handle 7 TPS. This means there is a great need to implement plug-and-play user interfaces while speeding up performance to allow various people to get comfortable using and developing blockchain applications.
Developing simple set up processes and integrating faster and easier-to-use interfaces will help people understand the non-technical aspects of blockchain.The industry will surely hit a tipping point where blockchain technology will become a part of people’s everyday life, fully understanding its non-technical benefits.
Aside from the factors mentioned above, blockchain should continue to improve its security and drastically reduce its carbon footprint.
Before we can fully adopt blockchain, governments must create an enabling environment for cryptocurrencies first. More people must experience using the technology to be able to understand how it works without having to ask technical people — just like how we use mobile phones and computers nowadays.