A Big Barrier to Mainstream Blockchain Adoption

Jeremy Epstein Business

The premise of the eBook “Blockchains in the Mainstream: When Will Everyone Else Know?” was that the primary hurdle to reorienting the world around a new technology infrastructure was a marketing one.

(What can I say? Sometimes, everything looks like a nail.)

That’s true, of course, but getting the marketing story right is necessary, but not sufficient.

William Mougayar has a great post (nothing new there since all of his posts are top-notch) called “The Blockchain is Still Waiting for its Web, Here is a Blueprint for Getting us There.”

He and I are of the same mind when it comes to the current level of maturation of the web. We both feel like it’s Internet circa 1993. (Note: not everyone agrees with us.)

If you buy our argument, then you’ll most likely agree with the rest of William’s premise.

There’s a standards deficit.

Here’s a little background to frame my thinking on William’s post.

When I began this deep dive into blockchains and decentralization, the one thing I didn’t know was when the tipping point would hit.

In fact, when my wife asked me about how certain I was that blockchains were a “thing,” I responded by saying:

“I KNOW that the blockchain football game is starting at 1pm on Sunday. I know I have a ticket and am in the stadium. What I don’t know is if it is noon on Sunday, noon on Friday, or 5 months before the season starts.”

Since then, what I’ve realized is that while it isn’t quite noon on Sunday, it’s also not 5 months before the season starts.

It’s pretty clear to anyone who is watching that worldwide interest in blockchain, decentralized, and crypto-based technologies are growing dramatically. In fact, a recent report by McKinsey sees blockchain technology reaching full potential in 5 years and “found 64 different use cases for blockchains in a survey of 200 companies.”  

We’ve seen organizations as diverse as the FDA, Homeland Security, Tokio Marine, and Sweden’s land registry announce initiatives. And this doesn’t even include “that the established banking industry is pouring money into blockchain technology far faster and more steadily, and a likely target of $400 million during 2019.”

Blockchain momentum is growing, which is great-on many levels.

But there’s a problem looming and it’s what William calls out.

Everyone is building their own blockchain-based solution, but there isn’t necessarily a great way (or any way) for those solutions to talk to each other.

In short, there’s no blockchain-based inter-operability.

Think about the world we take for granted now.  If you work at a big company, you click on a URL on a corporate intranet and get taken to a place on the public web. If you click on a URL in a mobile app, you go to a website. It works everywhere.

William’s point is that this type of connectivity is going to be critical to bridge multiple blockchain implementations.

Just one example would be crypto-tokens.

As the number of crypto-tokens explodes (and the business models for those evolve), we’re all going to expect, actually demand, interoperability between the tokens.

If I have a Bitcoin and I want to exchange it for a StorjCoin, I can use ShapeShift.

In the future, there will be tens of thousands of tokens (the NestCoin I get for sharing the internal temperature in my house, FitbitCoin for sharing how much I walk, and my WindowsCoin for using Windows). Each of us will want to track, trade, and utilize in near real-time (or have our agents do it on our behalf.).  If there are no standards, it’s going to get REALLY messy. As great as ShapeShift is, we can’t go there everytime.

 

The world of blockchains, which is really just infrastructure after all, is going to require a series of layers on top of it that allow for seamless interoperability and which make blockchains invisible.

Judging from the recent debates on block size among the Bitcoin community, gaining consensus among a group of people who believe in decentralization as a principle is going to be critical and essential.

As an aside, this is one of the reasons why I am actually bullish on Ethereum.

When the DAO hack happened, I was concerned about the sacrifice of the principle of immutability, but what Vitalik and team did was basically say, “yes, we believe in immutability in the long run, but in the short-run, we’re not going to compromise the integrity of the entire effort.”

It’s the equivalent of a parent saying, “I want my kids to be independent in the long run, but in the short run, I’m not going to let my 3 year old roam around the neighborhood by himself.”

Securing the agreement and nurturing the standards while staying focused on the long term (as Tim Berners-Lee did, which William quoted) is the way this thing will have to play out.

As Sir Tim said:

Had the technology been proprietary, and in my total control, it would probably not have taken off. You can’t propose that something be a universal space and at the same time keep control of it.

William asks the question of: how will we get standards?

I think the answer will be that there will be a network of networks that realize it’s in everyone’s best interest to do so and will “take one for the team.”

The zealots and and the purists will be left behind.

The good news is that there are enough pragmatic visionaries to get this done.

It will take time, but this is the exciting part of innovation because if you see a standard emerging and you can build on top of it, there’s a ton of value to be generated.

Kudos to William for highlighting this critical piece of the story as a barrier to mainstream adoption, which is just another way of saying “growth and value creation.”