The Notion of Mainstream Adoption as a Criteria for Crypto SuccessJanuary 19, 2019
When it comes to adoption of crypto-based applications or dapps, the main notion of 2018 was the idea that the masses are almost there and that they are slowly moving towards adoption. Throughout the year, analysts openly contemplated the impact of particular institutional investors on the value of a particular asset. This included the launch of the bitcoin futures, expansion of the venture capital arena into crypto and even Yale’s entrance into the crypto investment domain.
However, instead of rising, the prices went down and did so significantly. Now it is 2019 and those masses are still just about to arrive. Yet, there is clear evidence that the mainstream adoption in many forms already occurred. This can be seen in media coverage by networks like Bloomberg and CNBC who constantly follow cryptocurrencies and things lie RobinHood and Coinbase services with millions of users.
In fact, many believe that the price hike of 2017 was directly caused by retail services for the larger user base and the influx of investors with a lot of enthusiasm. But, there is no such narrative in the domain of decentralized adoption space where the notion of mainstream adoption is focused both on the UX improvements and DAUs (daily active users). In both domains, the results of the current state of play in this field do not look promising. So, how can dapps get to a better position not just now, but also in the months and years to come?
The Building Process
The current state of dapps is pretty self-evident – unlike esports and other novel digital ventures that have incredible adoption numbers, the decentralized applications are stagnating. Their user numbers are constantly very low and the user experience seemingly always near the bottom of the general app offer. To make things worse, the same ecosystem has always been ripe with ICOs that are questionable, ]direct scams and many tokens that are today practically valueless. With this in mind, believing that millions of users are just around the corner is wishful thinking at its worst.
Even if magically millions of people did get access to apps they wanted to use, what would keep them there? Not the design or the UX, not the back-end functionality and not the long-term prospect that is usually non-existent. Of course, some gambling dapps managed to make a faithful audience, but all of them come from the domain of cryptocurrency gambling.
They managed to build an audience by providing the lowest common denominator for all gambling users – their dapps worked and were not a scam. But, aside from that, they like all other dapps, managed to provide little more than that. This resulted in even the most popular dapps not being able to step out of their niche user base. But, there could be more to the development of these applications that is not directly tied to the user numbers.
Among the gambling and betting daps, Augur is somewhat of an exception. While it definitely is not related to any other activity except online gambling, its prediction market provided a qualitatively new user experience for many who started using it. The company behind Augur came about through an ICO that was the first for a dapp built on the ethereum network, which had a development cycle of three years.
Augur still remains several steps behind the regular app UX, it is still a big technical achievement. The record of users and bets for the US Midterm election shows that it managed to entice many new users to take part in its ecosystem. These numbers fell back down after the election but it still showed that there is an evident and currently present potential in the dapp sphere. In its moment of glory, it managed to overcome its competitors PredictIt by almost half a million USD in stakes – this was a huge win of a dapp over a centralized prediction market that is PredictIt.
A Growing Domain
Augur is not alone in its clear potential. Decentralized exchanges, including ForkDelta and IDEX, are also seeing their user base grow all of the time. DEX, a decentralized messaging platform has recently moved to the Beta phase, which is also a notable accomplishment. These are all dapps based on the ethereum network, but they are not the only decentralized applications being developed. In the world of bitcoin, there is the Lightning Network that saw a notable uptick in channels and nodes.
Now, the list of Lighting Network apps is growing steadily. The development space even includes Graphite, which represents a decentralized version of the Google doc service and offers. In six months, there will be many more dapps and their effect on the global level is hard to measure. One thing is sure – they will come about no matter how good or bad the state of the crypto market might be.
Beyond User Numbers
The space around decentralized apps is growing so fast that many would be tempted to call it a bubble which it very well might be in some form. But, the same could have been said for petroleum, railroads, electricity and even the internet. All of these grew too fast for the rest of the world to properly catch up. The fallout from this fact has often blown back to the owners and developers of these new technologies like it could do again on this occasion.
But, after some bubble does burst, the whole industry does not go away. Instead, from the bubble bursts come out companies that become generational giants like Standard Oil, or General Electric or Amazon. All of them were there when the bubble got punctured but managed to survive and thrive in a space that many called a dying domain back in some critical and low moment.
Some might claim that crypto is currently located in one of those moments. But, the major rewards have not gone away. All of that stands just beyond the user numbers and bottom lines of companies in the present moment. Chasing these more distant goals might be more difficult but their endgame reward could be as big as those of the previously mentioned companies.