Over the past few years, the cryptocurrency space has been growing at an increasing pace. The crypto markets have become more and more popular amongst investors, and the value of most major digital currencies has skyrocketed over time. However, since January 2018, the markets have gone in another direction.
Bitcoin has drastically lost in value, falling from $19,000 in December 2017 to $6,500 at the time of writing this article. Ethereum, who’s blockchain is widely used for ICOs, and specific ERC20 tokens have also lost a lot of value, going down from over $1350 to $270 at the time of this article. To clearly understand the trends of the crypto markets, we have to analyze the difference between the hype surrounding them and the actual usefulness and applications of the blockchain technology.
There have been a lot of enthusiasm about bitcoin and other cryptocurrencies over the past months, with millions of individuals investing large sums in the markets. We have seen the industry see an exponential boom from November to December 2017, with all the major digital currencies seeing all-time highs. However, we can argue that this was mostly all due to “hype.” The reason I believe this is because there has also been a sharp decline after that. Bitcoin, arguably the driving force of the whole space, has seen its value decrease and its most avid supporters pull out their investments. The reason for this is because most people have focused on the potential gains and opportunity for profit, rather than on the blockchain technology itself.
A lot of investors have been interested in cryptocurrencies because it was seen as a “get-rich-quick” scheme, rather than a real technological advancement and financial revolution. As a result, when the markets experience a downward trend, most of these investors will sell-off their digital assets making the situation worse. Furthermore, millions of people have invested in ICOs, thinking of the profits they could make with promising projects. In the end, these projects don’t deliver tangible results, can’t fulfill their engagements, can’t achieve their goals, and end up disappointing investors. What we need for the space to grow and for the industry to develop itself are innovation and real-life blockchain applications.
I truly believe that to regain stability and for the crypto markets to grow positively in the proper direction, the blockchain user adoption is the key. Individuals have to understand that the blockchain technology is the underlying asset that is the most valuable, rather than the cryptocurrencies themselves. The blockchain is the real revolution that will drive and support significant industries in the future. We can assume that fields like medicine, finance, e-commerce, payments and more will heavily rely on the blockchain technology. This is why the user adoption is what will make this technology successful and will make the crypto markets go up in value. When more and more individuals will understand the power of the decentralized ledger, and what it can bring to existing industries, the markets will positively be impacted.
Moreover, as users understand and adopt the blockchain technology, it will also drive innovations surrounding it and will push forward space as a whole. We can only hope for a spike in blockchain user adoption rate in the upcoming months, to lead to a future of innovation, healthy markets, and true decentralization.
For the markets to go up, the blockchain adoption needs to increase considerably. I can think of following factors that can contribute to the Blockchain mass-adoption.
- Scalability: It has to be easy to use and scalable for millions. The easier the blockchain innovations are, the easier it will be for millions of individuals to use the new technology.
- Universal Use Case and Ease of Use: There has to be a universal use case, which means that there needs to be one overall purpose for the blockchain technology. There has to be one industry that would rely entirely on the blockchain, making it the sole proprietary technology behind it, and therefore, boosting the adoption rate.
- Reliability: The he blockchain needs to be very reliable to be attractive to thousands and thousands of users on a regular basis.
- Regulation and Government Support: the technology needs to have strong support from the government, and be well regulated and controlled. With all these factors in place, the blockchain will gain a lot of users and will become part of our society.
If adoption increases, people will use the blockchain in their everyday life without needing them to understand the underlying complexity of the technology. They will use it for payments, for transferring of money, for e-commerce and much more. This means that the blockchain will become part of our daily life, and will, therefore, change the way we behave and the way we interact with each other. Individuals don’t necessarily need to understand the way it works but need to know how to use it.
If we take the example of currency notes, users don’t need to understand how it works, the regulations behind them, the government obligations, etc. All they need to know is how to use it, how important it is, and its value. This is why I firmly believe that the blockchain will integrate mainstream society and everyday life once we reach that stage. If individuals use applications and services that rely on the blockchain technology, then we will see a spike in user adoption rate and the value of the crypto markets and industry as a whole. If the general public starts using the decentralized ledger technology “without necessarily understanding” it, then we will reach mass adoption of Blockchain Technology.