I’ve been thinking about writing a piece around this for a while. On the eve of Berlin Blockchain Week 2019, I figured this might be as good of a time as any to push this out.
Berlin Blockchain Week will see the gathering of hundreds (maybe thousands) of developers, founders, investors and other tech enthusiasts around Web3Summit, and many other events across the city. What makes Berlin Blockchain Week a little different to most <INSERT PLACE NAME> Blockchain Weeks is that a much higher percentage of the audience will be techies. Most cities’ ‘Blockchain Week’ is overrun by projects trying to get cash for their upcoming whitepaper idea, a proportion of LinkedIn’s several million Blockchain Advisors, or hundreds of the 10,000 crypto VC funds looking for the next 100x. But Berlin feels a bit more like people are ‘in it for the tech’. To be confirmed…
Blockchain is NOT about technology
If you read one sentence in this post, I hope you read the title. One thing I want to try to get across to people and projects as we look towards the Twenty Twenties is that Blockchain is NOT about technology. This whole space is very much dominated by devs. Most of the earliest adopters in the space over the past decade were naturally devs due to the complexities of getting started with Bitcoin. So rightly so, much of the higher echelons of power in blockchain are occupied by some brilliant dev minds.
I’ve only really been around since the beginning of 2017, but the discourse is totally dominated by tech, what makes the best tech and why one tech is better than another tech. Let’s call this ‘Devsplaining’. I was fully on board with this through 2017 and 2018 because who am I to say otherwise. But from looking at the market, the adoption rate of new blockchains, the impact new features or the production capabilities of many concepts, it leads me to believe that the success of Blockchain, as an industry, is not about technology.
Devsplaining — For a Dev to comment on or explain something to a non-Dev in a condescending, overconfident, and often inaccurate or oversimplified manner.
Before You Troll Me
Apologies if any of the above offended you or you think my statement about blockchain and technology is the stupidest thing you’ve heard this year. Hear me out though.
My point here is that so much of the narrative and the conversation is driven by the technology side of blockchain. This is a key aspect for sure, but we can’t code our way to the promised decentralised future. Blockchain, in my opinion, is much more about the ecosystem or community you build, the tech is secondary. Don’t get me wrong the tech is extremely important, but there are a lot of super-smart people working on this, whether it be sharding, interoperability, or STARKs, they’ll find solutions, if they are even possible.
For the rest of us, we really have to start looking at adoption and use cases. There is plenty there to start working with, but one of the big issues right now is that the average guy in the street still thinks that this whole space is about buying your Starbucks with Bitcoin *Facepalm*. Who is going out there and explaining to people that Blockchain is little more than a new type of operating system? It allows us to create new apps that were never before possible or gives us features to improve some current technologies, allowing for new business models or potentially drastically altering the cost of many business processes. 99% of people really don’t know this or think you can do the same thing with current technologies.
Who wins the race to adoption?
With so many layer one projects (Blockchains) to build on top of and new mainnets launching almost every single week, you have to wonder where the winners will be. Token price movements are often a barometer of the current perceived success of a project. Many people don’t like that and I don’t think it’s the be-all and end-all, but a nosediving token price is also not the sign of good health. The total market capitalisation of the token is also a good barometer for current perceived success, but this can often be skewed based on when the project launched, its initial success at token launch (TGE) or the release of large amounts of tokens into circulation at later dates.
A positively increasing, flat or fairly steady token price is usually a good indicator or a strong community or ecosystem. The reason is often that essentially you have a set of believers propping up the price due to the project being ‘good value at X rate’. However, even with the strongest ecosystem, you are still in the hands of larger crypto-macroeconomic factors that may still give you negative movement.
But all of these factors aside, building a set of long term believers allows you to leverage those people to find more believers, to kickoff an ecosystem and later achieve a thriving self-sustaining ecosystem. This should be the goal of any blockchain project, from chain to DEX to Dapp.
The projects that capture the hearts and minds of the most amount of people, delivering top technology, fostering their ecosystem with more than money and discover the widest possible userbase will be the most likely to achieve ‘adoption’. Projects who ignore their community, their token price and ineffectively build an ecosystem will struggle massively to grow their base of believers and if anything, they will actually shed many believers to other projects.
You are not a startup
Unfortunately for some, once your token is live, you essentially become a publicly-traded company, token holders want answers, they want transparency and they demand progression. Often this is excessive and we have to learn to set expectations, but too many projects through 2017 and 2018 ignored the fact that they are public-facing (or got unlucky due to the market). If you have issued a token then it is very hard to operate as a true startup, be insular in your communication or not value your community, without serious repercussions.
Not taking control of this has lead to many projects fading out of relevance with enormous backlash from the communities they had previously built. If you are a developer looking to build a Dapp, a user looking to use a product or a potential token investor, do you really want to help build the ecosystem of a project with such negative sentiment? Go check out the correlation between 2017’s hyped projects and their current community sentiment if you don’t believe me here.
This isn’t an exact science, but I want to state three projects that either on purpose or through their narrative have achieved ‘adoption’. Call me Captain Obvious.
Bitcoin is not the fastest, most scalable, it doesn’t have smart contracts (directly) and evolution is slow. But it clearly has the widest adoption and acceptance. It has a first-mover advantage for sure, but it is united by a shared belief that it will succeed.
Even with newer blockchains that on paper have far better features and usability the baked in community that Bitcoin built early on is its strongest asset (yes they do also have the resources to maintain that).
Ethereum’s ecosystem is a force to be reckoned with. Even with their issues around scaling or various other complaints that people have about Ethereum, it is by far the most advanced smart contract enabled platform. Not as a technology necessarily, but as an ecosystem. Adoption everywhere and also much of that on private chains and not the public network.
Ethereum has nailed it when creating a captive audience, a culture and a community. It goes beyond the technology and ETH diehards have the patience that any problems will be overcome.
Cosmos has done a great job at fostering its ecosystem. Long before the technology or token were live, Cosmos built a strong foundation of believers. In my opinion, without the distractions of a live token, it allowed them to focus their efforts on their ecosystem.
At the launch of the Cosmos Network, you really saw the power of what has been built and just how many believers they had managed to amass. You can say technology will be a big part of their success but the ecosystem they have built so far transcends that and it rare for recently launched networks.
So back to my original point, next week is Berlin Blockchain Week. Lots of extremely high-calibre projects will be in town and many incredible ideas will be born from conversations had around the city. Just please remember that Blockchain is NOT about technology. The success of blockchain is defined by adoption and its infiltration into our daily lives. Technology is only one aspect to that success, but much bigger focuses should be put onto what projects are doing to build their ecosystems. Ecosystems procreate to make bigger ecosystems. Before long they take on a life of their own and the originator is merely a component of something bigger. The winners of worldwide adoption will be the projects who create the best environment for procreation.
Originally published at https://blog.hype.partners on August 16, 2019.