What’s special about blockchain is not only the elegant simplicity of the technology but also what it stands for — a cultural shift from centralized power to decentralized governance. As we look to the future and try to understand its impact, let’s talk about some challenges it’s facing today in hope to find solutions to ensure its mass adoption.
One of the biggest challenges in the blockchain space today is scalability, that means higher transactions per second (TPS) and lower gas fee per transaction. To put into perspective, Bitcoin currently can process about 7 TPS, Ethereum 1.0 implemented with Proof of Work around 15 TPS, compared to payment networks like Visa which claims to be able to process 65,000 TPS. In order to include more everyday-people into the space, the system will need to not only be reliable but also scalable.
- Ethereum 2.0 with Proof of Stake is predicted to process about 100,000 TPS
- Layer 2: building extra layers on top of the main blockchain
It’s not necessarily that people want better technology, but rather a better experience with technology. Convenience, speed, usability, stunning interfaces, smooth interactions and many more, are what matter to most people at the end of the day. Bringing attention to things like user privacy and decentralization is great but only takes us halfway to mass adoption, we’ll also need to consider things like how complicated it is for people to install wallets, how long do they have to wait after making a transaction, and are users aware of the control they have of their data.
- Dapper Labs’ “Value without compromise” approach: “Anything of value to you is decentralized. Everything else is fast and easy.” Basically means combining the benefits of both centralization and decentralization. A great example is NBA Top Shot, where the sign-up process (setting up a wallet) is simple thanks to centralization and the NFTs are stored on the decentralized Flow blockchain.
As GaryVee puts it, “If you actually understand blockchain, it’s really hard to wrap your head around how Russia, China, and America are gonna accept and allow this to happen.” Blockchain is truly a disruptive technology in terms of the threats it poses upon centralized systems and perhaps authorities, it is about bringing more power to the people rather than the selected few, but it doesn’t mean it shouldn’t be regulated. As we’ve seen with Bitcoin’s pseudonymity, which provides a more-than-perfect platform for terrorist financing, illegal platforms, and just bad actors in general to interact and exchange value. The tricky part is what to regulate and to what extent. Is Bitcoin, or any cryptocurrency for that matter, a commodity or asset? What are reasonable KYC (Know Your Customer) policies? These are uncharted territories for government regulators who are still figuring out Internet legislation in general, just recently realizing the impact of social media not being responsible for the content generated by the users on their platforms (aka Section 230). The short-term future of blockchain depends a lot on the attitude of these regulators.
- When designing and building blockchain products, make sure to keep the security aspect in mind (how can malicious actors abuse the platform/product) and not overly focus on privacy
These aren’t easy problems to solve, and they certainly won’t get solved overnight. To realize the future of a blockchain-enabled world, it will take much more collaboration between people from all backgrounds to not only push the limits of technology but also challenge the idea of how things should work in our society. One of the most amazing things about blockchain is the communities it creates, if together we look beyond the short-term monetary value and use the vision of a more open, equal, and united world as a guiding star, I believe we can accelerate and guarantee the mass adoption of blockchain.