Opinion: Pay-to-use blockchain will never achieve mass adoption

Author: Jon RiceJon Rice, Cointelegraph; Compiler: Songxue, Golden Finance

Pay-to-use blockchain is already a reality.

Of course, not for us – those pesky crypto people. We’re more than happy to open wallets, engrave mnemonic phrases on steel cards buried in the ground, find exchanges that haven’t been blocked yet, wrap some assets to boost returns, and become OpSec professionals.

If permissionless blockchain is to become the backbone of our online experience, three major changes will need to happen:

They need to be free.

They need to be unencumbered.

They need familiarity.

“Free” means free to the user, “unobstructed” means it’s as easy as opening an app or playing a video game, and “familiar” means we need to stop asking ordinary people to change their behavior to meet the limitations of our technology.

Now, there are zero on those three fronts. In fact, we’re so far away from where we need to be that we’re not even trying to seriously address these problems—we’re busy making small, incremental improvements to dysfunctional technology rather than addressing the root causes of the dysfunction itself.

FREE TO USE

Layer-1 blockchains are designed and built by those who believe their value lies in monetizing their users directly.

This is a fallacy.

Google serves you ads, which indirectly makes you money. Facebook makes money from your data but doesn’t charge you to use its platform. The Apple Store takes a 30% commission from developers and publishers, not from you.

In all cases, you pay - just not in cash.

Google receives 85 billion visits per month. If it monetized it directly, charging just a tenth of a cent to visit its homepage, it could theoretically bring in $85 million in revenue each month.

But it doesn’t do that because the number of people willing to pay cash for the Google experience is miniscule compared to the number of people willing to serve them ads.

We are used to indirect monetization. However, current blockchain protocols subject us to direct monetization, requiring us to pay gas fees for each transaction.

One of the most exciting premises of Web3 is the possibility it creates for aligned incentives between creators and consumers. Countless non-fungible token (NFT) creators have found ways to grow communities around such incentives, but first-tier blockchain builders just keep doing the same thing over and over again.

No matter how small their fee is, most people still won’t pay it due to phaseouts from companies like Solana or the countless Layer 2s.

No Obstacles and Simple

We’re not very loyal to our apps. About 77% of daily active users abandon Android apps within three days. It is estimated that 25% of all downloaded apps are abandoned within minutes due to improper entry.

Andrew Chen, a partner at Andreessen Horowitz who invests in games, metaverse and consumer technology, shared the chart below. He advises, “The best way to change the retention curve is to target the first few days of usage, especially the first visit.”

Average retention curve for Android apps. Source: Andrew Chen/Quetra

Compare the onboarding process for a poorly designed application to the onboarding process for encryption. It might suck, but they’re not even the same sport. Cryptocurrency is the most unfriendly technology ever created. For those who struggle with technology, it’s like being slapped in the face repeatedly in the digital world.

Cryptocurrencies are not getting friendlier over time.

Therefore, blockchain must change. It must become an unencumbered experience, a background technology like everything else we use—from the internet to our phones to our televisions.

We don’t care how they work. All we care about is whether they work.

Familiar and fun

Finally, perhaps my biggest criticism of the cryptocurrency industry is how indifferent we are to asking billions of people to do things they don’t really want to do.

Cryptocurrencies are not good at creating decentralized social media alternatives to Facebook. It’s not great at creating unique gaming experiences. It’s not good at replacing the traditional provider-user Web2 model with a collaboratively incentivized Web3 model.

It specializes in monkey pictures, scams, Twitter arguments and speculative trading.

That’s not to say that cryptocurrency doesn’t have a use—it absolutely does. If we stop replicating the financial systems and inequalities that made crypto necessary in the first place, the economic models crypto supports will eventually be seen as a decisive shift in power structures and individual autonomy.

But only if we make it as easy to use as opening an app or clearing a level in a game, because that’s what people actually need in real life.

It’s all stupid, impossible, and just wishful thinking - right?

None of this is impossible.

We’re just conditioned to believe it is because some people have become very, very rich by promoting pay-to-use underlying blockchains that have niche appeal in the market.

Ethereum is a brilliant innovation that will continue to be the foundation of decentralized finance precisely because it is secure, decentralized, and slow to evolve. However, it won’t revolutionize gaming because gamers won’t pay gas fees.

Solana is great for NFTs and maybe even stablecoins, but it’s not great for smart cities or the Internet of Things.

It’s time for the blockchain industry to admit that our path to becoming the foundation of consumer technology is hindered by these basic facts:

• People don’t want to pay for something that should be free.
• They don’t want to do things that should be easy but appear to be difficult.
• They don’t want to change their behavior to fit our worldview.

The sooner we build protocols and applications that accept these realities, the sooner we can silence critics and change the world.