Why Cryptocurrency is Hurting Blockchain

It’s like the proverbial carrot dangling in front of us. Every now and then it swings in and we catch a nibble. And oh, it tastes so good! The allure is strong, the promise is great. Yet still, we can’t quite seem to catch it and put it to good use. The carrot is blockchain. It’s still waiting, as a technology, to truly go mainstream. While decentralized applications using blockchain are abundant, blockchain has yet to enter the enterprise world, let alone reach the mass consumer markets. It is entirely possible that cryptocurrency may be the reason why.

Blockchain is too often conflated with cryptocurrency. This is a problem, for blockchain is not cryptocurrency, nor is cryptocurrency blockchain. It is simply an underlying, foundational technology that makes cryptocurrency work. Thos who understand blockchain, decentralization and how it all comes together, know this. In my discussions with CIO’s and CTO’s of small to medium sized enterprises however and in consumer netnographic research, blockchain remains mysterious, alluring even, but misunderstood and less comprehended in the value it brings. Most often, I hear that it is cryptocurrency. And the foibles of cryptocurrency aren’t doing blockchain any favours these days.

To understand why, you need to think about how consumers and businesses view and use technology. For businesses, a new technology is adopted at scale when early adopters and visionaries have proven the business case that shows the technology either reduces costs or helps increase revenues in a quantitative way. This happens through a cycle of events. Consulting and advisory firms such as Gartner, Info-Tech or Forrester, research it, write about it and push the technology, whatever it is, through conferences, white papers and research documents. Industry pundits write about it. The hype builds. Usually, it takes about a decade for a new technology to get adopted at scale in enterprise businesses. Blockchain came out in the world in 2008, so that’s now 13 years ago. Only a few blockchain applications are in what Gartner calls the “slope of enlightenment.” Most of them still languish in the early adopter phase and are struggling to cross the chasm into broad acceptance.

For consumers, all they see is cryptocurrency nestled alongside blockchain. Consumers are an inherently lazy bunch. I don’t mean this in a negative sense, we just are. With so much software getting better and tools like Artificial Intelligence improving weekly, technology companies have become very good at creating digital products. These products, when they are well designed, are easy to use, the value proposition immediately seen and comprehended by the consumer. So they’re adopted fast.

Cryptocurrency has had a fairly bad ride over the past few years. The wobbling of Bitcoin, Ethereum and others. The silliness of Dogecoin flailing about with vague comments and tweets from Elon Musk. Cyber criminals using it to get ransomware payments. Many starting, umping up in ridiculous valuations only to plummet and disappear. Fraudulent hucksters such as Quadriga and Gerald Cotton, of which you can find an excellent podcast about it here on CBC.

Consumers in the mass market aren’t going to spend time learning the differences between cryptocurrency and blockchain. They just don’t care, because they have lives they’re living and only, for the most part, consider the headlines of stories, and they’re not so good. So they conflate the two and move on. Technology at scale, any technology, is adopted by consumers when there is minimal friction in using it. For the enterprise, CIO’s and CTO’s are struggling with the basics of digital transformations and becoming more digitally mature. The main research houses and big consulting agencies that advise still proclaim it to be an edge technology…only worth running experiments. It is much the same with Artificial Intelligence. Cloud services companies like Salesforce, AWS, Google Enterprise, Microsoft Azure and so on, have little interest in the decentralized web, and like blockchain, when it sits in their ecosystem. That’s not bad. It just doesn’t help blockchain and the argument for the decentralized web and related technologies.

Blockchain is such an incredible technology that can, in many ways, make our world a much better place. From dealing with climate change, to stopping fraud in the fisheries sector, improving asset and contract management across all sectors, reducing the risk of data loss due to the old DNS infrastructure and more.

Startups in the blockchain space need good UX strategies and exceptional CX and UX designs and plans. Good product management here is critical. Many are developing multiple applications as it can be easy to do, but struggle to bring them to market. And until cryptocurrency is loosened as the albatross around the neck of blockchain, it will struggle to grow at scale. Blockchain and decentralization are critical to the very fabric, the warp and woof of the internet.

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