Pay per use block chains they're done.
Not for us, of course: the cryptocurrency nerd crowd. We are happy to open wallets, record seed phrases on steel cards that we bury in the ground, we find exchanges we haven't been blocked from yet, we wrap some assets to take advantage of the performance and become OpSec professionals while praying to the blockchain gods that the North Koreans are not online at the moment.
We are fine with this. Years of experience have eased the pain.
But the mass adoption we were all hoping for? It depends on the 99% of people who have no appetite for that kind of trauma.
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For permissionless blockchains to become the backbone of our online experiences, three major changes need to occur:
- They need to become free.
- They need to stop having friction.
- They need to get familiar.
โFreeโ means free for the user, โfrictionlessโ means as easy as opening an app or playing a video game, and โfriendlyโ means we should stop asking everyday people to change their behavior to meet the constraints of our technology. We need to find them where they already are.
Right now we are at zero for three. In fact, we're so far from where we need to be that we're not even trying to address these problems seriously: we're busy making small, incremental improvements to dysfunctional technology rather than addressing the root of the dysfunction itself.
Free to use
Layer 1 Blockchains They have been designed, built and funded by people who believe their value is in monetizing the user directly.
This is a fallacy.
Google serves you ads. It monetizes you indirectly. Facebook monetizes your data, but does not charge you to use its platform. The Apple Store takes a 30% cut from developers and publishers, not from you.
In all cases, you pay, but not in cash.
Google receives 85 billion visits a month. If it was monetized directly, charging only one tenth of a cent To visit its home page, it could theoretically raise $85 million each month.
Not so, since the group of people who want to pay cash for that experience is infinitely small compared to those who are okay with Google showing them ads and keeping them free.
We are used to being indirectly monetized. But current blockchain protocols monetize us directly, asking us to pay gas fees for each transaction.
One of the most interesting premises of Web3 is that it creates the possibility of aligned incentives between creators and consumers. Uncountable non-fungible token (NFT) Creators have found ways to grow communities around such incentives, but layer 1 blockchain creators keep doing the same thing, over and over again.
And no matter how small your fees are, thanks to incremental reductions from companies like Solana or the countless layer 2s out there, it's still a fee most people won't pay.
Frictionless and simple
We are not very loyal to our applications. Around 77% of daily active users abandon Android apps within three days. Dear suggest that 25% of all downloaded apps are abandoned within minutes due to poor onboarding.
Andrew Chen, a partner at Andreessen Horowitz who invests in gaming, metaverse and consumer technology, shared the following graph. He suggested that โthe best way to bend the retention curve is to focus on the first few days of use and, in particular, the first visit.โ
Compare the process of onboarding a poorly designed app to onboarding cryptocurrency. It may be bad, but it's not even the same sport. Cryptocurrencies are the most user-unfriendly technology ever promoted to the public. For those who struggle with technology, it's the digital equivalent of getting punched in the face repeatedly.
By Mike Tyson.
At its peak.
And over time, cryptocurrencies haven't gotten much friendlier. You, dear reader, are enjoying a specialized publication. You're probably a degen with a liquidity position in Uniswap and a Milady in cold storage. But even the words in that sentence don't make sense to a normal person.
So, blockchain has to change. It has to become a frictionless experience, a background technology, like everything we use, from the Internet to our phones to our televisions.
we do not care as they work. we only care that they work.
Family and fun
Lastly, and perhaps my biggest criticism of the crypto industry, is how completely indifferent we have become to asking billions of people to do things they don't really want to do.
Cryptocurrencies have not been good at creating decentralized social media alternatives to Facebook. It hasn't been good at creating unique gaming experiences. It has not been good at replacing traditional provider-user Web2 models with incentive-aligned Web3 models.
Related: Ethereum About to Be Crushed by Liquid Staking Tokens
He's been good at monkey pictures, scams, Twitter discussions, and speculative trading.
This does not mean that cryptocurrencies are useless. Absolutely it is. The economic models that enable cryptocurrencies will eventually be seen as a decisive shift in power structures and personal autonomy, if we stop replicating the financial system and inequality that made cryptocurrencies necessary in the first place.
But only if we make it as easy to use as opening an app or beating a level in a game. Because that's what people really do, in real life.
This is all nonsense, impossible and just an illusion, right?
None of this is impossible.
We have simply been conditioned to believe that it is, as some people have become very, very (very) rich by promoting fundamental pay-as-you-go blockchains that have niche appeal at best.
Ethereum is a wonderful innovation that will continue to serve as the foundation for decentralized finance precisely because it is secure, decentralized, and slow moving. But it won't revolutionize gaming, as players won't pay gas fees. Period.
Solana is great for NFTs, maybe even stablecoins. It won't work for smart cities or the Internet of Things.
It is time for the blockchain industry to recognize that our path to becoming a foundation for consumer technology is blocked by these fundamental truths:
- People don't want to pay for what should be free.
- They don't want to do difficult things that should be easy.
- And they don't want to change their behavior to fit our worldview.
The sooner we build protocols and applications that accept these realities, the sooner we will silence critics and change the world.
jon rice is the founder of the Koinos Federation, an alliance of projects based on the free-to-use Koinos blockchain. He was previously editor-in-chief of Cointelegraph, Blockworks and Crypto Briefing.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
