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If you ask people off the street in any given country, they’ll likely know something about crypto and maybe blockchain too. Blockchain and crypto have begun to emerge into the forefront of the minds of many, but somehow it still isn’t widely or regularly used.
The question here is twofold — why is this the current reality, and what do we need to do to change it? When will we start to see widespread blockchain adoption?
The “why” is elusive. There are many different contributing factors.
People tend to be conservative, especially when it comes to the money in their pocket, and money has not undergone a revolution since the first Mesopotamian shekel was minted 5,000 years ago. Mass crypto adoption is not going to happen overnight.
Widespread awareness is definitely the first step: you can’t adopt something you don’t know about.
But people don’t change their ways immediately after learning about a new system — especially when it comes to finances, because they don’t want to risk losing what they already have.
Adopting a new financial system is much easier if you don’t have much to lose. This is largely why citizens of unstable or developing countries are quicker to adopt crypto: it gives them something of true value that is much more reliable than their native currencies.
The second big “why” relates to limited use cases.
At the moment, you can’t use cryptos to pay for products and services that people use day-to-day. Grocery, retail, and hardware stores, or any other store you might want to purchase from, will probably not accept crypto payments.
Although paypal supports a few major cryptocurrencies, and at one point you could buy a Tesla with bitcoin, use cases are fairly limited for the average person’s daily life. And with the fees associated with the movement of crypto assets, this is, at the moment and for the foreseeable future, not the best option for payment.
Additionally, crypto holders currently can’t rely on the prolonged acceptance of cryptos as payment. A good example of this is Elon Musk’s short-lived acceptance of bitcoin for Tesla purchases, which he no longer accepts.
It is no doubt that the biggest challenges surrounding the widespread adoption of cryptocurrencies and blockchain technology are related to user experience. The problem here is twofold: on one hand, crypto users demand a high level of decentralization from crypto products which presents obstacles and challenges for projects. On the other hand, crypto products need to compete with centralized products, and at the end of the day, users care most about their immediate experience: loading speeds, transaction speeds, ease of use, etc.
The problem with the anonymity of Satoshi Nakomoto (or its biggest virtue according to many) is that it catapulted decentralization to the forefront of public awareness. Since then, crypto products, apps, NFTs, and even crypto games, have needed to prove or claim 100% decentralization in order to be embraced by the crypto community.
Decentralization has become a pseudo-religion. People rate products on their degree of decentralization and anything with an ounce of centralization mixed in is dismissed. But this obsession does not have its feet on the ground.
In reality, not all blockchain uses are created equal, and some pieces of information really don’t need to be stored on the blockchain. Some bits of information require enhanced privacy and censorship resistance, while others simply do not. A currency transaction is probably something that would need to be recorded and stored on-chain, whereas the design for a crypto game can probably be hosted on a central server.
It seems that we find ourselves in a catch-22 between unrealistic expectations of users and the reality of decentralized technology, with a conservative outlook on finance mixed in. It seems that this recipe is the perfect combination to prevent the widespread adoption of blockchain technology and cryptocurrencies.
One solution is to introduce a second layer to address the needs of the user and create a unified experience despite the fragmented essence of decentralization. Magic Square is achieving this by introducing the first app store in the crypto space, which is a consolidated place for users to discover, use, and interact with the crypto community.
Many layer2 solutions are highly centralized to provide the level of experience users are looking for. But Magic Square has created a unique solution that provides a highly decentralized layer2 buffer for cryptocurrency-based applications. Magic Square achieves this by powering the platform with a community of validators. Almost all Magic Square decisions are decided by the community which makes the platform especially attractive for the decentralized community.
Although the obstacles facing the decentralized space might seem daunting and large-scale, the solutions that Magic Square is presenting have the potential to rock the boat and bring this incredible technology to every sector of life. Until then, get your updates right here on the Magic Square blog, and follow us on social media for product developments. Who knows, mass adoption just might be right around the corner.