Ever since the introduction of Bitcoin, the very first Decentralized Application (DApp), we have seen multiple use cases arise in the last ten years, from crypto exchanges, data storage, to gaming and entertainment. While much has been said about the potential for blockchain technology to positively impact almost every aspect of our lives, the prospect of mainstream adoption still seems like a lofty target for the relatively nascent industry to achieve. Though we have seen encouraging signs of adoption in recent years, there is still a long way to go before we start to see the tangible benefits that blockchain technology can bring to our daily lives.
At its current state, significant barriers hinder the rate of adoption for everyday users by limiting their ability to interact with blockchain technology seamlessly. To engage with DApps, users would require a sufficient level of technical knowledge, and an understanding of how cryptocurrencies work, along with how to acquire, store, and use them. Coupled with slow transaction speeds and inefficient systems, it is not surprising that adoption rates have not lived up to the hype, thanks to the inaccessibility and difficulty of using DApps on blockchain platforms.
For blockchain technology to make its mainstream breakthrough, the industry will have to pivot its focus to the usability of DApps, and lower the barriers to entry for everyday users. Users should not have to undergo multiple steps of procuring and securing tokens, or feel overwhelmed by the sheer amount of technical knowledge required to even begin using the DApps. Instead, development of DApps should focus on allowing users to earn and receive tokens through the platform natively. A current example of this is Bermi, a social network that allows users to earn cryptocurrencies by creating and interacting with viral videos. Another example is OnBlock, a platform that allows users to experience DApps on the IOST ecosystem with just a phone number, without the need for private keys, wallets, and accounts. Only when the barriers to entry are lowered and users are familiarized with the concepts of blockchain, will we start to see breakthroughs in adoption.
To encourage developers in creating meaningful and user-friendly DApps for users, a holistic support system of projects, incubators, accelerators, and venture capitalists is also needed to provide sufficient resources and capital. When developers are given adequate support and tools to create valuable DApps that can break down the current barriers for both consumers and enterprises, the blockchain industry will be able to thrive and grow closer towards the eventual goal of achieving mainstream adoption.
IOST co-founder & CEO Jimmy Zhong
Jimmy is the Co-founder and Chief Executive Officer of IOST; the application-friendly, next generation public lockchain infrastructure helping decentralized app developers overcome some of the most challenging problems with mass adoption. An entrepreneur at heart, Jimmy started his first business while still at high school in Beijing. Moving to the United States shortly after, he co-founded several technology startups while at university, including Studypool, a 500 Startups backed-online platform connecting students to tutors.
Looking to drive the next wave of internet services, Jimmy believes in the promise that a more scalable blockchain infrastructure will bring in helping developers accelerate the adoption of decentralized applications. He holds a Bachelors of Science in Mathematics and Computer Science from Emory University, Atlanta.
Guest post and Mr. Zhong’s photo arranged by PR firm Wachsman
The autumn of 2020 has been a lucrative one for bitcoin investors, with the world’s most famous cryptocurrency being awoken from a bearish end to the summer with the news that payments giant PayPal was set to begin accommodating BTC payments within its 346 million global user base.
With the news of PayPal’s accommodation of Bitcoin emerging on October 21, we can see a significant rise in the value of the cryptocurrency leading to BTC almost reaching highs of $14,000 before a correction took place.
However, the long-term impact of PayPal accepting the buying, selling, holding and spending of bitcoin within their accounts could lead to huge levels of adoption of the currency. Could we be on the verge of an era of unprecedented growth for both Bitcoin and the world of crypto as a whole?
A “Pivotal Moment” In Bitcoin’s History
The arrival of PayPal accommodating Bitcoin represents the biggest single step that any cryptocurrency has made toward mainstream adoption in over 10 years of existence.
Jason Deane, an analyst at Quantum Economics, told Decrypt that PayPal’s announcement regarding its accommodation of bitcoin “could very much be the moment that is considered pivotal when the Bitcoin history books are written.”
“In my view, this is an extremely significant move for cryptocurrency adoption that is likely to expand Bitcoin’s reach at a vastly accelerated level, drive the development of additional services and serve as a rock-solid endorsement of the concept of cryptocurrency leading to further institutional involvement,” Deane explained.
Entering A Market Of 346 Million Users
One vitally significant aspect of PayPal’s move to accommodate bitcoin is the fact that it, along with other cryptocurrencies like bitcoin cash, ether and litecoin, can now be used to shop with the firm’s 26 million merchants across the world from 2021 onward.
With over 346 million users, PayPal has provided a brand-new layer of practicality for cryptocurrencies that can help its users not only invest in bitcoin but also spend it as if it were a fiat currency within its network.
Furthermore, PayPal appears to understand its role in propelling cryptocurrencies into the financial mainstream, and the company’s President and CEO Dan Schulman has spoken of the challenges that the payment giant expects to face in opening bitcoin up to wider audiences.
“Our global reach, digital payments expertise, two-sided network and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange,” Shulman explained, per Finextra. “We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.”
With the price of bitcoin hovering above the $16,000 mark at the time of writing, mass adoption could see the value of investments in the currency rise exponentially — making the coin an attractive proposition for those looking to find an asset that can appreciate faster than traditional stocks and shares.
But what about the notion of adopting Bitcoin with the intention of spending on grocery shopping with PayPal? The scalability of coins with older blockchain frameworks like Bitcoin could be troublesome for any meaningfully practical applications. Currently, Bitcoin is able to process up to seven transactions per second — a far cry from Visa’s 24,000 transactions per second.
While this could be a problem in terms of practical usage, some altcoin networks like Ripple have the ability to handle as many as 1,500 transactions per second. And second layer applications for Bitcoin like the Lightning Network are actively iterating toward faster and more efficient BTC transactions.
Risks To Bitcoin Adoption
One of the most significant issues in PayPal’s adoption of cryptocurrencies stems from the fact that the platform is offering a “custodial service” to users. This means that, despite having the power to buy and sell bitcoin, users won’t actually be able to hold their assets or transfer them to other wallets. Cryptocurrency commentator and the leader of Lightning development firm Zap Jack Mallers explained on Twitter that this move effectively renders PayPal bitcoin as “more or less a separate asset confined to the PayPal network.”
Also, there may also still be uncertainty as to whether the cryptocurrency can overcome the threat of new rivals entering the market.
Many of the world’s biggest economies are looking to make their way into developing central bank digital currencies (CBDCs), with powerhouses like China already leading the way with its own digital yuan. However, both the U.S. and EU have also been exploring the prospect of transitioning into CBDCs also.
Last month, European Central Bank President Christine Lagard commented that a digital euro currency should be issued to trade alongside the fiat version, with the traditional Euro ultimately being phased out soon after.
As more of the world’s largest central banks and large corporations transition towards digital currencies, it seems inevitable that Bitcoin will soon have to face the threats of new competitors backed by global governments. Global central banks will likely make moves in order to continue their control over the issuance of money supply, and future governmental regulations to clamp down on decentralized cryptocurrencies like bitcoin could hinder the progress made by PayPal’s foray into crypto.
Bitcoin’s move into the financial mainstream was never going to be an easy one, and there’s bound to be great hurdles to overcome in the future. But for now, the world of crypto should rejoice at the arrival of PayPal, and the biggest leap yet towards a new frontier of mass adoption.
This is a guest post by Peter Jobes. Opinions expressed are entirely his own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.