As 2022 dawned, we faced a world of unknown possibilities, driven by an ever-expanding prospect of exciting new technologies. How are these cutting-edge technologies being adopted, from their eccentric beginnings to widespread commercial acceptance?
Five stages of adoption
In his book “Crossing the Chasm” Geoffrey A. Moore presents a model for the phases of the introduction of new technologies. The model shows these five tiers, defined by the psychographic characteristics of consumers at each stage, from the very first innovators to the very last to adopt them.
Here are the stages of the technology adoption curve:
- Innovators/tech enthusiasts (2.5%)
- Early adopters/visionaries (13.5%)
- Early majority/pragmatists (34%)
- Late Majority/Conservatives (34%)
- Laggards/Sceptics (16%)
The adoption of technology for any organization or institution ultimately depends on a cost-benefit analysis. This valuation is primarily driven by financial factors presented as a return on investment. Other factors to consider include how secure and therefore how trustworthy a new technology is, its efficiency of use, ease of use for employees, the length of time and effort required to learn how to use the new technology, public opinion (perceived or voiced) and more .
the rift
Certain obstacles from any or all of these categories can create a divide that slows progress. These breaks usually occur between two levels/types of adopters.
As shown in the chart linked above, this distinct divide tends to occur between visionaries and pragmatists, marking entry into the mainstream market. According to the author of Crossing the Chasm, the reason for this is that visionaries and pragmatists use disruptive tech products for very different reasons. Visionaries welcome big changes based on projected future rewards, while pragmatists are more cautious and only accept change incrementally to achieve what they perceive as a safer transition. Therefore, the bridge between these two groups is more like a leap than a smooth evolution.
Every organization faces challenges when adopting new technologies, but the larger the organization, the slower adoption will be. In direct contrast, most smaller private sector organizations foster a culture of experimentation and encourage innovation by rewarding performance directly in the form of equity, bonuses and pay increases.
Blockchain Adoption
One of the greatest technological innovations of the 21st century, the paradigm-shifting public blockchain protocol is now opening up enormous opportunities in various industries around the world.
Peer-to-peer, auditable, transparent, and secure cryptocurrency introduced a way for individuals to exchange value outside of the legacy banking system. Blockchain technology enabled the first peer-to-peer “digital cash” network in which transactions could be verified without the involvement of a centralized third party (like a bank or government) and with perfect data integrity. This innovation has dramatically expanded access to alternative financial services for millions of unbanked people around the world and spurred a global financial revolution. Using our technology adoption chart, it’s easy to see how the excitement around such an innovation brought the first two groups of innovators/technology enthusiasts and early adopters/visionaries into early adoption.
Despite complex initial processes for “mining” (running bitcoin software), buying and trading bitcoin (the software keys used to access bitcoin software), these early market enthusiasts supported its slow and steady growth. Following the launch of Ethereum, the first smart-contract-compatible blockchain and distributed computer processor in 2014, blockchain enthusiasts grew and began welcoming hundreds, drawing on thousands of “altcoins” (software keys for public blockchain protocols). extended with various actual and planned uses.
According to a report by Crypto.com, the number of cryptocurrency users grew to 221 million by June 2021, with the market nearly doubling in the first half of 2021. Currently, the total cryptocurrency market is valued at around $2 trillion after hitting an all-time high of around $3 trillion. However, despite the enthusiasm of early adopters, the user experience for most blockchain-based applications remains smooth and overly complex for the average web user. Ease of use is the next frontier blockchain technology developers need to address in order to bring this technology to the masses.
For blockchain software to enter the mainstream market, it must evolve beyond the use case of purely speculative cryptocurrencies to be embraced by more traditional markets and institutions for their own innovation. Mass commercialization is only possible through mass understanding, next-level layering and applicability of the many use cases for blockchain technology. These now rapidly evolving global use cases include:
- DeFi (decentralized finance) platforms that enable new smart contract-enabled lending, borrowing and yield farming to generate profits unavailable in traditional finance. There are also financial products that were previously only available to institutions, such as interest rate swaps.
- NFTs (non-fungible tokens) to securely mark the authenticity of virtual and physical art, luxury goods, collectibles and tradable elements of virtual reality platforms.
- Web 3 applications including decentralized social networks, gaming platforms and video/file sharing and storage options free from third party censorship and size restrictions.
- Record real estate sales via smart blockchain contracts, automating tedious processes like escrow, eliminating third parties.
- Secure, immutable 100% uptime tracking of key public data such as votes, corporate carbon emissions and other critical records.
- Tracking the product life cycle in the supply chain to ensure consistent delivery of goods and services.
As the new year begins, private institutions and governments worldwide are looking for new and innovative ways to improve technology, and grappling with new challenges to structural problems that have become apparent over the past two years. Commercialization of public blockchain protocols will be a top contender to leapfrog and modernize legacy systems for this global shift in 2022 and beyond.
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