When Bitcoin (BTC) first launched in 2009, it was motivated by the distrust of financial institutions and their fees, as well as the inflationary practices of central banks during the Great Recession. Bitcoin should usher in an era of decentralization, financial inclusion, and democratization.
Yet more than a decade later, as Bitcoin prices rise, we see the digital asset being hoarded by large, centralized financial institutions, risking the principles behind its creation. Bitcoin is now in danger of being predominantly in the financially locked-in realm – the very types of institutions that the creators initially wanted to avoid.
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Meanwhile, Big Tech has matured in the context of other potential blockchain applications that Bitcoin and other cryptocurrencies are built upon, and many are seeing the competition protection and abuse of power issues that come with its size. Problems like economic and financial control, data protection, disinformation and the general usurpation of users are the symptoms of structures that we let become too powerful.
It’s 2021 and we risk never delivering the promise of adoption made possible with these technologies. While the community has been busy making profits from crypto, we have the opportunity as an industry to create even greater value. The potential lies not in today’s crypto market cap, but in the billions of users and trillions of dollars of market potential that are the true promise of this technology.
Skepticism towards the mainstream
As an entrepreneur who was there for the last technological disruption to the internet, I played a role in one of the internet’s most dominant categories: social networks. As a co-founder of LinkedIn, I’m impressed by a similar kind of idealism that pervaded the Internet 1.0 era, but I also see the gap between those in this new art and those who have not yet experienced its benefits and are questioning its existence have to .
Crypto and blockchain are still in their infancy many years after their creation. There are around a hundred million Bitcoin and Ether wallets (ETH), while the Internet has 4.7 billion users. Even with an optimistic assumption of 250 million wallets and one user per wallet, crypto’s user base only makes up 5% of internet users. Crypto’s recent surge in market cap to $ 1 trillion is only 1% of the total market cap of the world’s public stock markets, which is $ 90 trillion. Most blockchain projects today still have extremely limited adoption, and their tokens are subject to volatile speculation.
With the exception of Bitcoin, which will eventually be approved by the pundits, and decentralized funding, which in its current speculative state has the potential to demonstrate real value, this community knows its fair share of skeptics. The mainstream is still wondering if crypto and blockchain solutions are looking for a problem when centralized solutions seem to be working well on a scale. The industry has still not piqued the mainstream imagination or showed any signs of mass adoption.
Ideals aside, I believe that decentralized tech can solve the pesky problems of big tech and finance in the years to come. To do this, we have to approach our industry in a more pragmatic and business-oriented manner. This mentality could run counter to the sensitivity of our entrepreneurs in the community. I’ve seen too many efforts that don’t work on products that are mainstream relevant. We also don’t measure success against traditional performance indicators such as product market adaptation, user base or sales. We still talk about utopian concepts and the size of our communities that speculate about tokens but mostly don’t use them.
Target the mainstream audience, not just enthusiasts
As an industry, we need to work on solutions that appeal to the mainstream, with a focus on applications or decentralized applications. We should figure out the applications before investing too much in infrastructure projects that are abundant in the ecosystem.
Today, the world’s leading companies provide end-user applications, not infrastructure providers. Take a look at the top 50 Internet companies: almost all of them offer solutions to a large addressable market of users with a large active user base. In addition, those who offer infrastructure solutions initially brought applications to market. Only after these applications had achieved a certain degree of scalability did these companies offer infrastructure tools. The most notable examples are Amazon and Amazon Web Services (1994 and 2006, respectively), Facebook and Facebook Platform (2004 and 2007), Google and Google Cloud (1998 and 2008), and LinkedIn and Confluent (2003 and 2014).
These companies first met the need for normal users and only after scaling their infrastructures did they launch their own tools. Until then, these infrastructure technologies solved the demands of the real world and were also conveniently tested in combat. Sure, many infrastructure companies were founded in the early Internet age, but can we name any of them today?
Our industry may have misunderstood when it started focusing on infrastructure. Just because Ethereum attracted critical attention early on, it shouldn’t have led to so many other infrastructure projects.
We should highlight the creation of more decentralized applications. Let us identify and focus on use cases with large addressable markets with vulnerabilities and opportunities to offer solutions. We should then try to achieve a product market adjustment. Let’s also be bolder and look beyond financial use cases. There are many common ways, including better versions of big tech applications and new use cases that have yet to be discovered. With solutions that work for real users, we should be working backwards to technologies that are really useful to develop.
Our solutions have to be ten times better than existing (centralized) solutions
These decentralized solutions must be significantly better than existing centralized solutions. Decentralization promoted for its own sake is not enough, as the benefits for users must be clear and tangible in order to convince them to change and adopt the decentralized versions.
Digital assets like Bitcoin are already well on their way to proving their superior properties as hedging against traditional currencies, and DeFi has the ability to truly reach the underserved financial services providers with its limitless capabilities. Many more types of services need to be developed.
As the industry finds out which solutions are better than their centralized counterparts, we should be passionate about digital identity and reputation. The category of social media platforms that dominated the first internet age and generated billions of dollars in sales (Facebook: $ 70 billion, Twitter: $ 3.5 billion, YouTube: $ 15.1 billion Dollars) and achieve even more market capitalization (Facebook: $ 805 billion, Twitter: $ 40 billion) depends on user data, which consists of user identities.
These platforms make money knowing the behavior, interests, and other aspects of their identity of their users. However, the monetary incentives between platforms and users conflict as the platforms all take monetary advantage of user data while user identities are held hostage. In return, users can continue to use the platforms for free. Since their rise, we have also faced serious existential challenges due to disinformation and data breaches.
Decentralized approaches promise to address the extremely unequal distribution of values between user identity and reputation. The total value of the user data can be distributed more equitably, with the value of the identities being carried over to the users. The better a person’s reputation, the more economic opportunities they have. Think of influencers, but they are democratized for everyone, because everyone has a good reputation. And there are additional benefits for users, e.g. B. control over the circumstances under which their identity data should be shared. There is also the potential for a decentralized solution to disinformation.
Services need to be convenient and accessible
Finally, there is a need to make the benefits of this technology more accessible and convenient by making the use of decentralized products much easier. When the overall friction of a product is reduced and easily accessed, more users are gained.
We need to focus on ease of use. We should spend as much time on the user experience as we do on smart contracts and blockchains. Truly secure wallets, one of the basic elements of this technology, are still too complex for the average person. Let us endeavor to live up to the statement of science fiction writer Arthur C. Clarke: “Any sufficiently advanced technology is indistinguishable from magic.” Products should only work for people. A successful decentralized service means users don’t need to know that it is powered by an underlying blockchain, just like traditional applications, users don’t need to know that underlying database systems are in place.
As an industry, we’ve been terribly explaining to users what we’re doing and we need to explain our solutions much better. Much of the jargon used in space appeals to Cypherpunks and funds wonks, whether it’s evidence of anything or financial concepts like crop farming. Granted, it’s natural for innovators and developers to create a common language to collaborate with, but it’s a very limited group of people. It’s important to tie our work together in everyday terms that a mainstream audience would appreciate, highlighting benefits like enabling, convenience, speed, and / or lower cost. The efforts of mainstream companies like PayPal and Square should be celebrated, but the decentralized natives would refuse not to offer their own hopefully superior versions.
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In the arc of history, including the history of technology, the world oscillates between centralized and decentralized structures as it tends towards more and more decentralization. Let’s take full advantage of the approaching trend towards decentralization. As in the Internet age, the winners of the decentralized economy may well be those who strive for massively addressable markets and associate significant value with the masses.
The views, thoughts, and opinions expressed here are the sole rights of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Eric Ly Co-founder of LinkedIn and founder of Hub Token. The Hub Human Trust Protocol focuses on the decentralization of identity and reputation. The project has released a reward-based DApp for global events and communities based on trust and recommendations.