Blockchain Technology Adoption and Potential Use-Cases

This article will look at the Blockchain technology adoption, where it is currently, and where it will head. Also, we will look at possible use-cases of the Blockchain in the financial and non-financial industries.

Table Of Contents

• Intro
• Blockchain Technology Adoption
• Potential Use-Cases
• Outro

Blockchain Technology Adoption

It takes a lot of time before new technologies get their final shape and find their spot. We don’t know yet what is the architecture of the perfect Blockchain. We have to examine it in various industries. As of 2022, public Blockchains are adopted primarily in DeFi and GameFi industries.
If we try to fit Blockchain into Geoffrey Moore’s technology adoption lifecycle, I think it will look like this.

Geoffrey Moore’s Technology Adoption Cycle and Gartner Hype Cycle

I think Blockchain entered the Early Adopters’ phase. It has a couple of years before reaching the Chasm, the most challenging stage during the Technology Adoption Lifecycle.
My reasoning is based on the current use cases. Even in the DeFi and GameFi industries, we see newcomers. There aren’t big incumbents that offer existing products on top of the Blockchain.
Where are Triple-A game studios? Why hasn’t Activision, EA Games offered in-game tradeable assets on the Blockchain?
What about Fintech challengers? Where are big names like Klarna, Affirm, N26, and Revolut?
Following two things have to happen to advance in this lifecycle.

Firstly, Blockchain has to advance in the technological aspect. The infrastructure behind it should be mature. This previous article was about this issue.

Secondly, Blockchain projects have to advance in the business aspect. All the speculative projects that don’t have a genuine business value have to burst, and projects addressing real-life pain points need to emerge. It will be a painful process, but the Gartner Hype Cycle suggests that it must happen sooner or later.

After that, I think we will enter the Chasm and see the true use-cases for Blockchain technology. Of course, it doesn’t mean every software product will implement it. It will not replace all the current product offerings, but it will impact a lot of real-life financial and non-financial use-cases.

Potential Use-Cases

As we’ve mentioned in our previous article, Blockchain has two main aspects: Trust and The Commonality of Knowledge.

So when we, as a startup, have already chosen some problem to solve, we can ask ourselves, is Blockchain the go-to technology?

Blockchain technology could be a good fit:

• When a business model involves Multiple active participants
• When we are dealing with Trust and Ownership problems

Multiple Participant

If the process has several separate ACTIVE participants involved, then it’s already a candidate for Blockchain usage.

Consider all the services that provide some custody services, for example, Escrow service providers. All the participants in the escrow contract must trust each other. Or think about supply chain management services and charity service providers.

In general, all of these service participants are actively involved in the overall product offering. Therefore, illegal or invalid behavior of even one of the participants will lead to the wrong or faulty output.

So, we can use the enforced TRUST aspect of the Blockchain to offer a better solution.

The Ownership

Who has the actual OWNERSHIP of the data, or some asset? Is it a user or a centralized company?

For example, I’m the rightful owner of my legal identity, my card number (some bank issued it, but I paid for it, and it’s mine), my car, and my flat. So when I’m giving this information to another company, I have to be sure that no one else should be able to claim the ownership of this asset. Every other party should be able to see who is the valid asset owner, and I should be able to prove this ownership easily.

In Contrast, currently, we depend on centralized companies or custodians. If they are hacked or unavailable, our ownership is under question.

Think about all types of global registries: the government or non-government institutions. Think about car insurance histories or car maintenance logs. Blockchain guarantees that the data is not altered or censored.

This type of value-propositions can be directly addressed with the Blockchain’s improved Trust and Commonality of Knowledge aspects.

So if there are no trust issues and there is no need for the commonality of the knowledge involved, it’s hard for me to come up with some ideas to use Blockchain. Centralized systems will always provide better performance than distributed ones.

Disclaimer — in this article, we will not discuss crypto business models and the benefits we can achieve by introducing various token types (government, utility, etc.). That’s an entirely different topic. However, we must keep in mind that introducing a better business model could be the main advantage over direct or indirect competitors. Currently, crypto startups offer lower fees to users than Web2 companies.

Outro

One of the main traps for Web3 entrepreneurs is building a product around the technology, not the user. Technology is not the ultimate goal. Technology is a way to achieve some goals. The goal is to solve or ease some problem. The user will or will not pay for this painkiller, depending on the severity of the problem. It’s worth noting that startups usually solve existing problems but in a different, more accessible, or painless manner.

So it’s not necessary and generally impossible to come up with a problem that is not already solved in one way or another.

When thinking about the Web3 startup, we must rethink revenue generation mechanics. For example, the Web2 world is all about big centralized companies and advertisements. Think about Google, Facebook, Youtube, and Instagram. In Contrast, the Web3 world could be a network of interconnected small economies or platforms. These platforms will have some inner-scoped tokens, and the primary revenue stream could be the transaction fees generated from some operations.

One way or another, At the end of the day, companies and technologies should serve people and solve their problems, not the other way around.