The three obstacles are holding back Blockchain’s mainstream adoption

The economy is tough. Crypto companies are collapsing. Scandals abound. And yet blockchain technology is still, as they say, “early.”

I spent 18 months leading engineers at a blockchain startup and have three key industry failure takeaways you need to know about where we are today with the technology.

1. The absence of foundation

Building a product in the blockchain space before 2022 was like arriving at a construction site without the necessary materials or equipment. Not only did you need to build the structure, but you also needed to mine and smelt the ore to make the building blocks.

Blockchain technology first became popular through its first and most basic application: cryptocurrencies. Bitcoin officially appeared in 2009, a year after the academic paper introducing it was published. But blockchain has the potential to do so much more than just facilitate cryptocurrency transactions. It is a technology that has the power to validate data independent of a company or person.

The future of blockchain depends on the tools available. We move forward by building on previous innovations. With Bitcoin (and later Non-fungible tokens, NFTs) being the first use of blockchain to gain mainstream visibility, the early stages of creating the tools and building blocks to enable more complex ideas were skipped before the public had a chance to evaluate or speculate.

In 2021, my team was working on ideas for a blockchain-first login system, but we had few options and no viable solutions to use a third-party service or leverage another company’s offering for this task. And our core business was not about developing new login methods for websites. So we needed to build our own solution, which was good, but probably not as good as the solutions that future startups would dedicate their entire business to developing.

The technology is maturing quickly in terms of speed, but gradually in terms of the building blocks that enable this growth. With blockchain, we skipped the basics and went straight to the mass market.

2. The lack of product focus

I attended several (9) blockchain technology conferences between 2021 and 2022 and found that while they were exciting and fun, the value varied greatly. At first, many of the conversations revolved around the basics of the technology, such as how to mine, store data in a blockchain, or create non-fungible tokens (NFTs). Other talks were about how people profited from crypto, or flipped NFTs for a project. At best, they were pitching for a new NFT drop (a drop is when a new collection of NFTs is released), or a wild party celebrating one.

In contrast, when I attended AI conferences, the conversations were more focused on real-world applications and products being developed. The companies and startups presenting at these events showcased how they were using AI to solve real-world problems and drive their businesses forward. Maturity was on another level and the speakers cared EVEN MORE about the industry of their problem domain than AI. AI was only exciting because of the problem solving it enabled.

Blockchain startups have historically been focused on the hype and potential for funding rather than solving real problems with the technology. Rather than being driven by a passion to address a specific problem, they are primarily focused on creating a “blockchain company” and trying to cash in on the hype surrounding the technology. This was driven by the mass visibility into the space which drives popular interest which leads to venture capital interests.

3. The challenge of reaching mainstream users

The blockchain industry currently lacks a mainstream user base. The majority of people who use or are involved in blockchain are those who work in the industry.

The blockchain space is still in its early stages and as such is still a niche market. Although there is a lot of enthusiasm and hype surrounding the technology, the reality is that it is still not widely adopted by ordinary users. This presents a unique challenge for companies operating in the space, as they primarily sell to other companies and enthusiasts who are already familiar with blockchain technology.

To truly reach maturity, the blockchain space needs to shift its focus from selling the technology itself to selling the value it provides to users. This means creating solutions that are accessible and easy to use for the average person, rather than just catering to a small group of enthusiasts. By doing this, blockchain technology can become more widely adopted and integrated into everyday life, making it an invisible but powerful tool to improve our lives.

What’s Next for Blockchain?

I am excited for the blockchain space to take a step back and for funding to decrease.

This will allow for the development of necessary building blocks that will add significant value to the technology.

As attention shifts to other areas, such as artificial intelligence, we will see companies that have been quietly working on these building blocks succeed. This will lead to the seamless integration of blockchain solutions into products and websites over the internet, in a supporting role. Blockchain will become as informatics solutions should be, invisible and everywhere.