Daily Crypto Thought #1: Users Don’t Care About Decentralization
When I was young, I wanted to be a writer. According to my parents, I later abandoned that dream because I found out how much writers actually make.
In reality, it was because I was way too OCD about it. When I wrote a column for my college newspaper, it took me hours to grind out a few measly hundreds of words, because I spent so much time editing it.
This is an experiment to see how long of a streak I can maintain in writing a daily thought about blockchains and cryptocurrencies. Like Alcoholics Anonymous, I’ll try to maintain a streak of daily thoughts, but if I falter and relapse, I’ll pick it up again the next day.
To maintain this streak, I’m going to take some shortcuts. There will be misspellings and grammatical errors, I may not link to the data I reference, and I might get stuff wrong. I’ll try fix any errors that I discover.
Wish me luck! Here’s the first thought…
One of the most concerning things in the crypto industry is the lack of dApp usage.
More and more people are getting native access to crypto: Ledger crossed the 1m wallets sold mark in Jan 2018; Metamask crossed 2m users; imToken’s mobile wallet has 400k users.
But dApp usage has been dropping. You’d think that dApp usage would be increasing at a pace commensurate with wallet access, but data shows that the opposite has been true. Per dappradar.com, the dApps most popular at the end of 2017 (CryptoKitties, ForkDelta) have seen 90% drops in adoption. While other dApps have gotten traction, the overall market seems to have gotten smaller, not bigger. While the bear market in crypto may have something to do with it, data is the ultimate arbiter.
Some believe that reducing barriers to entry like mobile access and fiat-to-crypto conversion will reduce the friction entailed in using dApps and unlock a wider market.
I concur that things like these will help (shout-out to the folks at Wyre building this!). However, I think the problem is deeper:
Users don’t care about decentralization.
Instead, they use apps that satisfy their needs better than other alternatives.
IDEX and ForkDelta are the most used dApps currently because it allows users to do something that they can’t do otherwise: get liquidity for tokens that aren’t listed on centralized exchanges. However, people who need to buy and sell shitcoins is a very small subset of the overall population.
While gaming and collectible dApps seem like the future because they potentially access a much larger market, I’m not sure they are satisfying user needs better than the alternatives.
None of the games, especially CryptoKitties, are fun. I have high hopes for Gods Unchained, but it’s not playable currently. Digital collectibles exist in other centralized forms as well — the jury’s still out whether they are 10x better in decentralized form.
Closing thought: we shouldn’t care about whether something is a decentralized app or a normal app. Instead, we should be asking:
What problem is this solving? Why is this 10x better than current alternatives?
