The Main Obstacles To Blockchain Mainstream Adoption Are Both Technical And Philosophical

in OCDlast month (edited)

I think what I and any one of us in the space should do more often is talk about cryptocurrency and blockchain with mainstream people both online and IRL. That is the way we who are throughly immersed in this subject matter can get an idea what's really holding back the industry. That said, public blockchains other than Bitcoin have only existed for not longer than 5-8 years. The industry is still very new.

Based on my listening to mainstream people IRL and reading what blockchain skeptics on Quora have had to say about it, the main obstacles are ignorance or misunderstandings, fear of sovereignty and poor user experience.

Ignorance and misunderstandings can be corrected by disseminating correct information. For example, if someone has only heard about Bitcoin has a very vague idea of what cryptocurrency or blockchains are, that can be explained. The technological basis of cryptocurrency in particular is easy to understand at a crude level because it's all founded upon distributed ledgers. A distributed ledger is simply a ledger copies of which are held on many computers simultaneously where the correctness of a ledger is decided by group consensus. Thus no central source of truth is not needed.

Ignorance or misunderstandings

One group is blockchain critics who consider cryptocurrency to be the only possible use case of blockchain. Some can be quite vehement, which is obviously a knee-jerk reaction caused by all the hype surrounding many new projects. To a degree these people have a valid point. Not every problem in the world needs to be solved with a blockchain. But many are unaware of some of the specific use cases where blockchains are useful. For example, probably the most convincing argument for Hive is the fact that having one's content and follower information on stored on Hive means sovereignty for the content creator vis-a-vis platforms. Because Hive itself is incapable of censoring anything (except by a supermajority of witnesses and even then only through a hard fork), a content creator on Hive is protected from potential tyranny by a single entity unlike on any Web 2.0 platform. Because of using a variant of DPoS as its consensus algorithm, Hive has high enough a throughput and low enough cost of use to serve a vastly larger user base than it currently does without the costs spiraling out of control. For app developers, it is notable that unlike on Web 2.0 where each app must deploy and maintain a proprietary back end, Hive apps can get away with very lightweight back ends in comparison to Web 2.0 apps. For example, all of the user-generated content is on the Hive blockchain. The good news are that we can remedy this problem by going out and setting the record straight.

Fear of sovereignty

The above brings me to the second obstacle which is fear of sovereignty. The god-like powers of the admins is in the back of the minds of all Web 2.0 users. The users of Web 2.0 are used to sloppy password management because recovery procedures are always at hand. In case of any unpleasantry encountered that goes beyond palatable, the first reaction of a Web 2.0 user is to contact moderators, those angelic creatures whose job is to protect innocent users from bad content or bad people, often prompted by readily-available widgets created just for that purpose. In contrast, Web 3.0 is a domain of freedom and responsibility where no one's hand gets held by authority figures.

It is not surprising at all that cryptocurrency and public blockchain adoption are furthest tech savvy people particularly in the West where individual responsibility has the strongest emphasis in society or in third world countries where the authorities are the most unreliable like in Venezuela. Nigeria is another leader in cryptocurrency Web 3.0 adoption because few Nigerians trust their authorities. Adding to the rise of Africa in Web 3.0 is the rapid proliferation of mobile internet there. Also, the young generations tend to be the largest in Africa.

Poor User Experience

Poor user experience is a direct result of the immaturity of the industry. It is most likely to the easiest and the most straightforward one to fix. It just takes some UX expertise and more developers starting to take them seriously. It is not enough to cater to an expert user base. But from what I've take place on Steem/Hive in the last 1-2 years, things have improved vastly and I'm convinced they will continue to improve further.

Conclusion

The fear of sovereignty is the hardest one of the three to fix. It's a philosophical and temperamental problem. The fundamental problem is with the people themselves. In my view, centralization of power is the root cause of all the greatest tragedies of the last 100 years. Those aspects that feed into the fear of sovereignty like the management for and full responsibility for one's keys can be fixed successfully to a large degree as the example of Hive Keychain demonstrates. This is where great UX design can do a lot of good. There are all sorts of solutions from centralized password protected vaults to integrated password management software that can be applied.

There still are existential risks to the space as Russia's recent strict anti-crypto legislation demonstrates. In Russia, a bill has been drafted to ban the use of cryptocurrency as a means of payment. Cryptocurrency mining will be hard hit by this, if the bill is passed into a law, because cryptocurrency miners are paid with cryptocurrency for their work. The Governor of the Bank of England has proposed the development of a global regulatory framework for cryptocurrency. The latter would be even worse because it would be an attempt at reining in cryptocurrency through a newly created centralized structure. It is not very concerning how some individual country, be it even the USA, regulates cryptocurrency because the world is a very large place. But when major figures in legacy finance start talking about a global regulatory framework, it is a potential problem. While global regulation might improve chances of adoption, it could water down the purpose of the entire sector.

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Interesting post.

But when major figures in legacy finance start talking about a global regulatory framework, it is a potential problem

This is an important point, I'm sure when it gets to it, countries like Nigeria will only copy and paste and send it to law. Eww.

I think governments around the world NOT having agreed upon how to deal with crypto is one of the most if not the most important thing protecting the space. For the government's point of view, crypto is both a threat and an opportunity. It's a threat because it is hard to control. But it's also an opportunity because it's a new industry capable of generating taxable economic activity. If governments around the world could agree on how to regulate crypto, then the control aspect would be amplified.

I think governments are going to love crypto, and using some basic regulations like KYC, etc., I think they also lower the threat.

Edit: talking about crypto in general, not about HIVE, which has done pretty well ... just got to improve the onboarding ...

With the exception of certain privacy coins crypto is much more traceable than cash. What governments only have to worry about is the anonymous on-ramps and off-ramps. But there's also the loss of monetary sovereignty that most governments could be expected to balk at.

What will help countries like Nigeria avoid regulations for now is the fact that the majority of the country is "unbanked" (do not have a bank account). Big banks over there rely mainly on high net worth individuals with millions-billions of Naira to keep afloat, and care less about the smaller accounts.

Unlike in the west, where the "whales" are the movers and shakers of crypto, in places like Venezuela and Nigeria, it is the little guy and girl with very little money that are making things happen cryptowise. Hence the banks won't notice what's happening until it's too late for them and the younger generation has adopted a new paradigm right under their noses.

Big banks over there rely mainly on high net worth individuals with millions-billions of Naira to keep afloat, and care less about the smaller accounts.

True true, I agree with this lol..

I was very disgusted when I saw this stuff couple of weeks ago...

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Like wth does this even mean. Over-sabi! Even cbn didnt direct any bank to be monitoring anything....glad I dont use first bank.

Terrible! haha. Well, not to worry, the youth will find a way to bypass banks sooner or later. There will come a time that people will just stop opening bank accounts altogether. Online based financial services are expanding across borders so it's only a matter of time before one of them sees the potential and jumps on it.

Also, some sharp youth were already doing the disruption in their own small way. For example there is a guy out there in Nigeria who used to swap Steem for Mobile phone credit. Everything happened online and transparently. You send him steem and your phone number in the memo, and he sends you the equivalent code (privately signed, so other people can't see it). Simple, brilliant.

Twitter:

Web 3.0 is a domain of freedom and responsibility where no one's hand gets held by authority figures.

This is very scary for most people!

This is where custodian third party solutions come in. That way, it can be arranged for you to be on Hive but not the custodian of your account if that is what you wish.

I agree 100%. Things need to be much more user friendly. People need something they can intuitively understand (as has been the case with everything in the computer age) so they feel in control. It'll get done, like you say, sooner or later. What has me a little fuddled though is just how long it's taking. I thought we'd have seen more advances by now.

I think that's precisely because of the novelty of it at a conceptual level.

And at a real hands-on level too. There's a primordial difference between command line and having a mouse, so to speak.

Improved UX can definitely part of it.

@markkujantunen Thanks for sharing! Personally, the existential risks to the crypto space is the most concerning.

I've recently heard an interview with a hedge fund heavyweight, whose view on bitcoin (and other alt coins) is that governments will outlaw them sooner or later. Make it illegal to transact in them.

"What can the people do, when the governments bring out all the guns?"


The paradox is that it is precisely that this space holds much promise that it may be snuffed out pre-emptively.

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What this space needs is tokens spread out into the hands of as many people as possible to make such a move as difficult as possible. We need hundreds of millions of people involved so as to make politicians not dare to outlaw crypto in fear of alienating too many people.