On Blockchain Adoption
At the recent Fields Institute Blockchain Event (September 2018), one of the stand-out presentations covered leading academic research on Blockchain Technology adoption, presented by Associated Professor Theophanis C. Stratopoulos of Waterloo University.
In reviewing the papers, one of the fascinating topics was the framework for measuring adoption (see the links included at the bottom of this post), which are based on the Diffusion of Innovation work done by Everett Rogers . The papers draw from the must-read book for entrepreneurs: “Crossing the Chasm” by Geoffrey A. Moore, which also refers to the work of Everett Rogers. Below is a summary of the works to peak your interest.
Please note, this article will refer to Blockchain with an upper case, which is simply preference of the author but is not intended to spark the “Blockchain” vs “blockchain” debate — let’s save that for a future post!
Diffusion of Innovation seeks to explain how, why, and at what rate new ideas and technologies spread. It makes use of a chart to depict the adoption, which looks like this:
The adoption lifecycle includes different types of adopters, which could extend from individuals to countries. For more details please read the Wikipedia entry included at the end. Geoffrey Moore added a gap in the adoption lifecycle (see next figure), between the early adopters of the product (the technology enthusiasts and visionaries) and the early majority (the pragmatists).
This gap is ominously called “The Chasm”.
What about Blockchain?
Well… that is the key question of the presentation and work of Professor Theophanis C. Stratopoulos: where is Blockchain adoption right now? Or to put in another way: is it before or after “The Chasm”?
Very good question! So where is Blockchain?
It turns out this is not easy to answer. The papers draw from several sources such as Google Trends (analytics on what people search), and from statistics on publications. The results seem to indicate (at least to me) that Blockchain adoption is somewhere around “The Chasm”. In the vicinity of it.
Here is an example of what Google Trends have to say on search results, going by what I believe people search when looking for Blockchain:
So, what do people care about (according to that chart above)? …Bitcoin! Do mind the chart needs to be read in particular way: 100 represents the top result and everything else is scaled after it.
That chart is not surprising, or should not be surprising at all. Somehow that chart looks familiar, and I think this is the one that is triggering my memory.
The “spike” in both charts is centered around December 2017 when Bitcoin hit top dollar ($19k). Funny enough, it seems Ripple did too (or I am reading too much into this? Let me know your thoughts!). So, Google Trends and CoinMarketCap align (roughly).
Trying to get to the point
One point is that Google Trends don’t seem to mean anything, besides rampant speculation on Bitcoin (and Ripple). I don’t think Google Trends show anything chasm related.
Why is that? Well, I have some theories:
- Google Trends relies on public data (search engines)
- The trends don’t seem to account for Consortium Blockchains
- There is a lot of work that is being done quietly, mostly by Consortia
- Many disagree with the term “Enterprise Blockchain” and prefer to use DLT
There is something else: The Innovation Diffusion theory does not include a recent phenomenon (or so I believe) which I would call “adoption compression”, where the cycle is shortened considerably due to feedback loops (positive and negative) built by social media. Remember 3D TV? It came and went before we even knew it was here.
We usually refer to that compression as a “fad”. Here is a list of things that worked on compressed adoption cycles ( just like 3D TV)
- Netbooks (The laptop that tried to be a tablet)
- QR Codes. Still around, but way down in usage. Possibly revived by Bitcoin
- Pokemon Go. This was more a fever than a fad
- Google Glass. Do I need to say more?
- GPS navigation devices. I still have one, but it will be hard to replace
- Blu-Ray discs. I have some, and I don’t know where to get more
- MP3 players. The iPhone is responsible for killing a lot of single use gadgets
There could be an argument that some of the technologies in the list above were replaced. True, but I remember them being all over and then nowhere.
As Google Trends did not show what I wanted, I am going to refer to another way of looking at adoption, and that is by using the Gartner Hype Cycle, shown here:
That rollercoaster adoption cycle I mentioned for 3D TV is closer to what Gartner describes. The bottom of the rollercoaster is what Gartner calls “The Trough of Disillusionment”. Ouch!
The question would be: where is Blockchain on this particular rollercoaster?
Blockchain is Everywhere and Nowhere
This is my pet theory: I think we are past “The Chasm” (in diffusion terms) and entering the “Trough of Disillusionment” in Gartner Rollercoaster terms. There is also a trap on the way for the unwary, when trying to figure out where Blockchain is in the Gartner diagram: it depends who you ask!
My own search on Blockchain news tells me that:
- A lot of the news are self-serving (either by sources that like Blockchain, or sources that hate Blockchain)
- The news are contradictory, in the style of nutrition news: Blockchain is good for you! No, wait, Blockchain is bad for you!
- It is questionable to mix DLT and Blockchain in the same sentence. People get silly trying to figure that one out
- There is a lot of hidden DLT out there, out of sight and mind and in Consortia Land (or is it Blockchain?)
Blockchain technology is like an “iceberg” (to call it something), which has a hidden mass. A reason for that mass to be hidden is on the connotations the word “Blockchain” brings up. I think we are going to be surprised, soon enough, on how far some industries are in the adoption curve.
Those under-the-radar adopters are just working at it quietly, to avoid the bad effects of the hype (board of directors worry about Bitcoin bad reputation). One of the presenters in the Fields event referred to that out-of-sight work as building “quiet competence”.
Blockchain technology is also evolving very fast, so whatever is discussed today will be obsolete in six months. This is one of the factors which could be delaying adoption, as many could be waiting for the brave to cross “The Chasm”. A lot could be written on Blockchain technology maturity, but that is a matter for another day.
One way to detect the “hidden mass” is to look for the killer apps of Blockchain in these use cases:
- Digital Identity (of the decentralized kind)
- Supply Chain (of all sorts of things)
Some reading material and contradictory news
This is where I provide some useful links for anybody who got this far.
Papers by Theophanis C. Stratopoulos
A TL;DR link for anybody who does not want to read the book “Crossing the Chasm”, which I recommend reading:
Mandatory Wikipedia entries:
And a questionable nutrition of Blockchain adoption news, on both sides of the spectrum. You be the judge of what is going on.
Disclaimer: The views and opinions expressed in this article are those of the author. They do not purport to reflect the policies, views, opinions or positions of The Blockchain Hub, any other agency, entity, organization, employer or company.