Why isn’t broader crypto mass adoption happening?
At some point, everyone working in the crypto space has asked themselves why mass adoption hasn’t happened. Some common assumptions for why this is the case are that the technology is not mature enough, that it isn’t scalable enough, and that the dev tools are so much worse than web 2.0 tools.
All these things are true, but I would argue that technology is not the only reason for a lack of mass adoption.
Technology is a necessary, but not a sufficient, condition for larger scale adoption. When I hear arguments that crypto mass adoption is primarily a technology problem, I think of a story about suitcases that I once heard Robert Schiller of Yale give in a lecture.
Adding Wheels to Luggage
The story goes like this: the idea of general vacation travel has existed since the mid-19th century, when the advent of larger scale rail and steamship travel made it possible for a broader audience. People since then have needed luggage for their travel.
At first, luggage consisted of trunks. For most of the 20th century, travelers used suitcases that looked something like this:
Throughout all the decades of hauling around luggage, it wasn’t until 1972 that Bernard Sadow was granted a patent for putting wheels on a suitcase.
Putting wheels on suitcases seems ridiculously obvious and useful, but adoption for the new rolling suitcase in the 70s was challenging. They were seen as “wimpy” and not masculine enough for men to adopt. And the design had challenges — it tended to fishtail behind you as you dragged it forward, making it hard to maneuver.
These design problems weren’t solved in a satisfactory way until Robert Plath, a Northwest Airlines pilot, had the idea of putting two wheels on the edge of the case with a long telescoping handle. He was granted a patent for the Rollaboard in 1991:
1991! Think about that for a minute. Isn’t it incredible that people labored to carry around luggage by hand for over 100 years without thinking to put wheels on it?
The key to the Rollaboard’s mass adoption was that Plath specifically targeted flight staff as early adopters. Other travelers would see pilots and flight attendants wheeling their luggage through airports and onto airplanes. This had a two-fold effect: it provided a highly visible showcase for the utility of the technology, but it also helped overcome the stigma by associating it with “professional” travelers.
There are important lessons in this story as we think about mass adoption of crypto, or for any technology for that matter. There is no arguing that the technology (wheel) was well-developed and well-understood by literally everyone. The obvious questions: why did it take 100 years for someone to come up with the idea of putting wheels directly on luggage? And once it was discovered, why were there still adoption challenges? What ultimately was the key to mass adoption?
Is Crypto Heading Toward 100 Years Without Wheels?
This story clearly shows that technology can exist for very long periods of time before anyone thinks to apply it to a particular problem. This application doesn’t happen automatically or inevitably. It can be right in front of you and still not be obvious. It is only obvious in retrospect.
Given this fact, the argument that “we just need to keep building and scaling crypto infrastructure and technology, and that adoption will follow” seems quite wrong. By that logic, we could be waiting 100 years for broader crypto adoption to happen.
Technology is a necessary, but not a sufficient, condition for broader mass adoption of a particular product or solution. For crypto, I would argue that we have already met basic functional product requirements. That the scalability of the technology, while obviously important and needing further work, is not the main challenge we are facing.
What is also needed are changing conditions that make the solution more relevant. In the case of wheeled luggage this was the expansion of air travel and airports where people had to self transport their own luggage over longer and longer distances. For crypto I think this is the increasing digitization of everything we do (software “eating the world”), with value-bearing systems being some of the last systems to have open and natively internet-centric versions. It feels like those conditions are increasingly met.
So what is it that is preventing the mass adoption of crypto that we are all waiting for? I think it boils down to needing a catalyst. Something that will serve the same purpose that the flight crews with their Rollaboards did for wheeled luggage. A scenario involving relatable people of how they use crypto to solve a problem better and more efficiently than other methods.
I’ve spent time thinking about what this scenario would be for crypto, and who the key early adopters could be. I don’t know what the answers are. But I don’t think hodling Bitcoins as a store of value is the catalyst. It has to be something that regular people can relate to, and that can change their existing mental models about how things are supposed to work. My best guess at this point is that Millenials on the other side of an increasing wealth gap will drive this change. Maybe DeFi and the returns it can generate over and above existing investments can act as a catalyst. But whatever it ends up being, I’m entirely confident that it will happen.