Mass Adoption of Blockchain – When?
Blockchain is still years away from mass adoption. We are in the early days of a nascent technology, and there are still significant challenges to overcome (e.g. low scalability, high energy consumption, lousy user experience, price manipulation in cryptocurrencies).
On the other hand, one might argue that the most prominent use case of Blockchain technology – Bitcoin – has at least reached the level of mass awareness. Thanks to the ubiquitous media coverage during the bitcoin bull run in 2017 many people have heard about the term "Bitcoin" and know that it is some sort of "electronic money". Though bitcoin has become a global phenomenon and brand name, only very few people actually use it for payments or as a store of value for their savings yet.
However, there is little doubt that Blockchain is a so-called general-purpose technology (GPT), a technology that can be applied in many different sectors (similar to steam engines, rails roads, electricity, computers, the internet or machine learning). History shows that general-purpose technologies need at least one decade to have a significant impact on economic and social structures, eventually leading to paradigm shifts in many industries.
But it seems that after the "crypto winter" of 2018 things are now moving faster as some current developments show:
The German Federal Financial Supervisory Authority (BaFin) approves Germany’s first security token offering (STO). Berlin-based startup Bitbond got the green light to sell security tokens to retail investors. The German crowdfunding platform Neufund already ran its own STO in December last year, which was only open to semi-professional investors with a minimum ticket size of € 100k. So, all credit goes to Bitbond for being the first company in Germany to run an STO for retail investors!
Moreover Continental (with the support of Commerzbank) successfully field-tested Blockchain technology for corporate financing by selling security tokens to an institutional investor (in this case Siemens). Someday all financial transactions will be Blockchain-based, it’s like moving from paper records to electronic systems in the 1960s/70s!
At a recent talk at Harvard Law School, Mark Zuckerberg revealed that Facebook is planning to add a Blockchain-based identity system to Facebook. Something else, however, has excited the Blockchain community much more: The New York Times reported a secret Facebook plan to introduce a Blockchain-based payment system for WhatsApp and Facebook Messenger. According to rumors, Facebook is working on a kind of stablecoin, which will enable international payments even for users without a bank account.
Meanwhile, US investment bank JP Morgan Chase announced to launch its own cryptocurrency, the JPM Coin. This centralized digital currency is based on a private Blockchain and backed one-to-one by US dollars. For now it seems to be for internal payment processing only, but the bank’s CEO Jamie Dimon suggested that JPM Coin could one day be used outside the bank (We dig deeper into this topic in our research piece).
In addition, Samsung confirmed that its new flagship phone Galaxy S10 will include a private crypto key storage (read: hardware wallet). This is huge news because it could help to solve the biggest UX issue of Blockchain: the handling of private and public keys. The question is: Will the next Apple iPhone also have its own hardware wallet for safely storing private keys?
Remember that we are still in the AOL/CompuServe/Netscape era of Blockchain – but things are moving fast, and the next billion dollar-companies of the Blockchain age will probably be launched in 2019.
Founder of chainDE