Crypto is the User Interface of Blockchain
“Design is a funny word. Some people think design means how it looks. But of course, if you dig deeper, it’s really how it works.” — Steve Jobs
Having been a consultant with arguably the largest technology company in the blockchain space, I often encounter the narrative that blockchain is great for enterprises while crypto is bad and to be shunned. This narrative encourages enterprises to explore using blockchains to improve supply chains and business processes of one form or another but relegates crypto token discussions to a narrative confined to organized crime, terrorism and ICO scams. This is played out extensively, with large enterprises across most sectors now running pilot blockchain initiatives while few are exploring how to incorporate crypto tokens into their operations.
“Consumerization always wins when it comes to digital technology.”
The problem is that as a result of this, the enterprise DLT (Distributed Ledger Technology) movement has become very blockchain focused, while the crypto movement has effectively become a consumer phenomenon. Anyone familiar with the history of the internet will tell you that if you are going to place bets on which of these approaches will prove most successful in the long run, then you would be wise to bet on the one that is consumerized. Consumerization always wins when it comes to digital technology. We have seen this with web 1.0 and web 2.0 and despite all the negativity around crypto there is no reason to assume it will be different for web 3.0.
Social marketing veterans will recall that companies did not flock to Facebook in 2007 and 2008 because they thought social media was a great new technology that could revolutionize how they engaged their customers. They flocked there simply because that was where consumers were and if they wanted to retain their attention they would have to meet them on the social platforms where they now spent their time. “Fish where the fish are” was the popular mantra of the day. This is likely to also be the case with crypto. Brands will have to embrace crypto not out of belief or alignment with the libertarian philosophy of the decentralists but simply because consumers are. Furthermore, the widening gulf between consumer and enterprise adoption of crypto is in many ways increasing the advantages that early enterprise crypto adopters (ala Google, Amazon, Facebook) are likely to accrue.
While distributed ledger technologies provide the infrastructure for processes to be optimized, it is the crypto economics of their protocols that create the commercial underpinnings of their success.
But there is more to it than this. While blockchain innovations in themselves, do very much lend themselves to supply and value chain optimization, the paradox often overlooked is that it is the crypto-economics of DLTs that provide the operational and incentive framework which make the processes optimized by these technologies commercially viable. Yes blockchains provide the infrastructure for processes to be optimized but it is the crypto-economics of the protocols that create the commercial underpinnings of their success. It will become increasingly difficult to separate the viability of the blockchains of successful decentralized ecosystems from the viability of the crypto currencies that enable their optimizations to remain viable at multi-enterprise, trans-regional scale. This is the hidden secret of blockchains and crypto currencies. They literally are two sides of the same token, if you’ll excuse the pun. You cannot have meaningful blockchain initiatives at global scale that do not eventually exploit crypto currencies because crypto currencies enable complex processes to be optimized and executed with a speed, scale and level of sophistication, security and fault resistance impossible to deliver with fiat instruments.
Finally, a crucial consideration also often overlooked is that processes optimized by blockchains are exposed to the market and users via crypto currencies. Even though the mechanics of how web 3.0 services are delivered will dramatically change compared to the web 2.0 apps of today, we are unlikely to see dramatic changes in the interfaces that people use to access such services. AR/VR and Voice are already well on their way towards full integration into centralized Web 2.0 apps, notably through Apple’s ARkit and Siri, Facebook’s Oculus, Amazon’s Alexa, etc. Where we will see big changes with web 3.0 DApps (Decentralized Apps) however will be in their use of crypto currencies. Blockchain enabled processes are likely to remain invisible to end users at the app/DApp interface layer and DApps will look and feel very much like apps albeit empowered by DLTs to do powerful new things. Crypto currencies however will become the primary interface through which people and markets interact with blockchains. Hence, why I believe that crypto currencies are not just the economic and commercial enablers of blockchains but also their primary user interface.
By Dele Atanda CEO: MetaMe Labs, First Citizen: The Internet.Foundation
