Despite all the excitement around cryptocurrencies, Initial Coin Offerings (ICOs), and tokens, most digital assets being bought right now are only for investment and speculation purposes. My non-tech friends, for example, aren’t telling me to use Steemit (decentralized Reddit) or OpenBazaar (decentralized Ebay), they’re telling me to buy Bitcoin or this new, hot cryptocurrency called Ethereum.
That’s a good and bad thing. Good, because money is flowing into the crypto space and with ICOs, forms of monetization are being created. These are two necessary first steps. But it’s bad, because all that stored value could wither away without decentralized applications (dApps) that incentivize mainstream usage of these currencies. Only then, will cryptocurrencies and other digital assets start to acquire real, unquestionable value.
All the necessary tools to build a dApp are already in place. What I have concerns about, is in regards to their mainstream adoption. There are two main bottlenecks: first, it’s hard to scale decentralized technologies; second, it’s as hard (if not harder) to change user habits.
Regarding the technical challenges, I’m optimistic that the community will find solutions to the problems that lie ahead. Here’s why: right now, the users of decentralized protocols and applications are enthusiastic developers. Out of curiosity, excitement, and first-mover opportunity, the space has been, and will continue to, naturally attract the top talent that is needed to innovate on secure and performant ways to create dApps.
But in regards to mainstream adoption, I’m skeptical about an everyday user’s willingness to switch to dApp alternatives. The biggest selling points of dApps right now are the privacy and security they offer without the need of a third party; and the most talked about applications are copycat dApps, e.g. a Facebook-like social network where users own their data. Yet, while everyday people may not like Facebook as a company, they do like its platform and network, and they surely don’t dislike Facebook enough to switch to another competitor without a sufficient reason. Same goes for Amazon, Uber, etc. And the honest truth is that these big companies do a good enough job at keeping a user’s data secure, while concealing any infringes on their user’s privacy. As such, copycat dApps alone don’t solve a big enough pain point for everyday, non-tech users.
To spark mainstream usage of dApps, the crypto space needs entrepreneurs that will leverage the blockchain to create novel app ideas. For this innovation to happen, we need: 1) developers with a fresh ideas, 2) a way for them to rapidly iterate through novel but bad dApp ideas.
I’ll end with a prediction: the technology that makes it easiest for developers of all levels to enter the space and start experimenting with dApps will have the biggest impact moving forward. But since all these new ideas will at first look like toys and be ignored, the impact of this technology won’t be readily evident until it’s already cemented a foothold in the space.