Is Ethereum Preventing Blockchain Adoption? | Blockchain Central


Hey everybody, welcome to a new episode of
BLOCKCHAIN CENTRAL. This is the first episode in our series aiming
to explain why we still haven’t seen a mainstream adoption of Blockchain technology. In this week’s first episode, we’ll look
at the projects with the biggest promise so far and look at the main roadblocks to adoption. In the following episodes, we’ll break down
the issues of scalability, governance and financing. —INTRO— For the past several years, all blockchain
enthusiasts—including our team here on the channel—have been talking about the benefits
of adopting DLT technologies into multiple mainstream functionalities. I’d even go beyond that and say that many
of us have been predicting a blockchain revolution. Yet, years go by and we still haven’t seen
any mainstream success of the technology that promised to change the world as we know it. Why is that? First of all, let’s define mainstream success. I think what is really needed is a Facebook
or Amazon level of success: a solution that is so useful and disruptive that it becomes
a household name globally. We’re all hoping for an blockchain app or
a service that adds so much value that it becomes a blueprint for success for the companies
to come. Let’s start by looking at the projects that
had the biggest promise of living up to the DLT hype. Then, we’ll try to find a reason why they
haven’t been a mainstream success. Arguably, the most promising projects include
Ethereum, Augur and the Lightning Network. I’m sure that the inclusion of Ethereum
needs no explanation; the promise of a decentralized, autonomous global computational platform is
just a very attractive proposition. The thing with Ethereum of course is that
it’s more like an operating system; it’s not appealing without a really powerful, ground-breaking
and popular app. Imagine an iPad without its apps; most people
wouldn’t have any use for it. Some argue that an app that would fulfil the
potential of Ethereum is Augur. Augur is a decentralized protocol that allows
for peer-to-peer decentralized prediction markets. These markets can be used to place bets on
future events. Of course, a single person making a prediction
wouldn’t be very effective. But if you aggregate knowledge from a diverse
pool of experts, you’re very likely to make the right prediction. Market participants are incentivized by being
rewarded for the correct prediction. What’s important, it’s not only a forecasting
tool, but could also have a viable economic function by allowing everyone to hedge against
risks. If you want to learn more about prediction
markets, make sure to check this video. It all looks extremely promising, but in February
2019 DappRadar reported that Augur had only 47 users and only 122 transactions in the
past 24 hours. So, what’s preventing it from going mainstream? Apart from a few reported issues with the
app right after launch, it can’t be denied that Augur itself demands a certain level
of technical knowledge. Also, according to some analyses, the issue
with Augur is more serious than just being user-friendly. Due to the volatile price of Ethereum, it
is difficult to anticipate Augur becoming a serious hedging tool. Ironically, the Ethereum-to-fiat conversion
would introduce too much unpredictability into the prediction market. On top of that, most people already have access
to established hedging tools which makes the use case for Augur a bit shaky. Another possible candidate for mainstream
adoption is Bitcoin’s Lightning Network. It is not a fully separate blockchain, but
rather an add-on to the existing Bitcoin blockchain. Its goal is to facilitate faster micro-payments
without overloading the main blockchain. It sounds like a great idea and the underlying
architecture of the system has been praised by experts. So, what’s the problem? According to multiple reports, the network
has been buggy to the point of users losing money. Many people justify the bugs by Lightning
still being in beta but, until it’s fully realized, we won’t know if it can become
the mainstream solution we were looking for. So, what needs to happen for us to see a mainstream
adoption of blockchain technology? Arguably, the biggest criterion is the underlying
technology being completely invisible to the end user. Even though DLT is often described as a beautiful
piece of engineering, most users don’t really care. It’s a bit like what’s going on with Snapchat
face filters: we hear that it’s a marvel of augmented reality, but we only care if
they work and are easy to use. It could seem like a fairly easy feat to achieve,
but because blockchain is still a young technology and developers have to focus on overcoming
technical difficulties, not enough effort can be devoted to making the user experience
easy and fun. The second fundamental issue with mainstream
success is scalability. Chances are that, even if a killer app appeared
and became successful, scalability issues would lead to a breakdown once too many users
started to participate in the system. We’ll analyze scalability in detail in a
follow-up episode so make sure to subscribe to the channel. The second important reason why we haven’t
seen mass adoption is the sheer number of projects. There are too many blockchain solutions and
altcoins that are currently competing for our attention. What’s more, most of them are complex, hard
to understand and are struggling with various technical issues. In addition, it’s not helping that some
of those projects turn out to be scams or disappear without a trace. Which brings us to our next point: bad PR. With so much drama connected to ICO scams,
pump and dumps and general market volatility, it is difficult to convince the mainstream
audience to get invested in the technology. In order for this to change, regulatory compliance
has to improve. But here, we face another internal conflict. Compliance would require a certain level of
centralization and oversight, as well as giving up a certain level of privacy. The DLT technology, in its very name, is constructed
to counteract centralization attempts and its supporters are almost allergic to that
word. Also, due to the global character of DLT,
it might feel like our current divided world is not ready for a truly international application
of blockchain. If even an established tech giant such as
Google is struggling with copyright laws in the European Union, what chances does an emerging,
disruptive technology have? This concept of being ahead of its time is
also relevant to one more aspect of blockchain development: many forward-facing solutions
depend on the success and development in other areas of technology. One example could be IOTA and the Internet
of Things. If you want to see our episode on that, click
here. So where is the breakthrough coming from? I wish I knew… My prediction would be that it will come from
an area we do not expect. If I were to bet on it, I’d say that massive
adoption will stem from a service that brings value to the users without requiring them
to provide any monetary input. Such a service—similarly to Instagram or
YouTube—would have an alternative way of generating income from the sheer size of the
accumulated user base. It could be gaming or dating apps. It could also be copyright, where immutability,
public access and smart contracts could clearly benefit the population. One way or the other, I have a feeling we’re
about to find out. Many people predict that 2019 will be the
year of mass adoption. Fingers crossed! Before you go, please note that this content
neither represents financial, legal, or tax advice, nor is it supposed to be understood
or interpreted as solicitation to buy or sell any securities, coins or tokens. Thank you so much for watching. If you liked this video, make sure to hit
that like button and don’t forget to subscribe to Blockchain Central to never miss a beat! See you in the next one!

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