Luke Stokes, MD of the Foundation for Interwallet Operability, discusses his recent visit to El Salvador and discovers how close we are to the prospect mass adoption of cryptocurrency…
Much has been made about Bitcoin’s design flaws, notably its high energy use, scalability issues, susceptibility to price manipulation from cryptocurrency whales and inherent price volatility.
One of the more overlooked design flaws to Bitcoin relates to the user experience. In modern finance, most transactions begin with some kind of invoice or request for payment, it’s how a person knows who to pay and how much to pay them. However, the Bitcoin network operates in stark contrast to this modality today and requires people to proactively send their assets to an anonymous, unidentifiable series of letters and numbers. Operational errors, miscopying addresses and man-in-the-middle attacks have seen people lose digital assets that are almost impossible to recover.
Bitcoin and digital assets clearly have a usability problem and although I hate drawing on overused analogies with the internet boom in the 1990s, I recall a time when accessing information on internet connected computers was complex and time consuming. It wasn’t until the open-source hypertext transfer protocol (http) arrived that accessing internet accessible information became easy even for the average person to navigate.
The FIO Protocol is achieving a similar goal for the entire blockchain ecosystem. FIO is a layer 2 usability solution for the entire blockchain ecosystem that abstracts away the complexities of the underlying blockchains. There’s no need for users to interact with complex public addresses. They now have the ability to not just send, but request crypto to ensure error-free transactions, to include information such as notes, order carts, invoices and more with transactions. All in a decentralised self sovereign manner.
These capabilities are just the beginning of what the FIO Protocol workflow layer can ultimately deliver.
Only when friction and uncertainty are removed can mass adoption become a reality, and although cryptocurrency adoption numbers remain relatively small, we are in fact only seven potential doublings away from billions of users.
Bitcoin’s usage and adoption is exceeding comparative adoption rates to the internet in the 1990’s.
Having just returned from El Salvador as part of a delegation led by Brock Pierce promoting Bitcoin use and greater financial inclusion, it’s hard to carry on dismissing Bitcoin and blockchain technology as a solution in search of a problem.
People were receiving remittances from relatives abroad and could spend it instantly with low fees for everyday goods and services.
In a region that has historically been beset by economic turmoil, corruption and massive inequalities, the Bitcoin network provides a financial gateway for people to access an asset that can’t be debased by governments or Central Banks, can be traded and sent 24/7 to anywhere in the world free from third parties, and governed by a preset code that lacks any bias.
Today’s financial infrastructure is slow, expensive, inefficient and excludes billions of people in countries such as El Salvador. Bitcoin’s application and use in the real world is starting to gain momentum beyond the narrow clique of technologists and geeks interested in blockchain technology. What I saw in El Salvador could be the start of a new era of digital currency adoption and implementation that will see people take control of their savings and wealth, secure in the knowledge that central bankers and governments won’t undermine or inflate away their earnings.
For this to become a reality, there needs to be trust and confidence from its user base that its infrastructure is secure and easy to use. The current cryptocurrency experience is awful and acts as an impediment towards achieving mass adoption, it’s the reason why a usability layer is required to help people navigate it.
For most of us, mass adoption seems as though it’s far from becoming a reality. However, exponential growth never feels right. It sneaks up on us because we don’t have many reference points in nature for the brain structures required to handle it.
Certainly, my trip to El Salvador and meeting government officials focused on the benefits of blockchain technology and Bitcoin made me think how far this network has come since I first came into contact with it in early 2013.
We are witnessing a paradigm shift in how people perceive value and its transfer, the role of the state, intermediaries and economic empowerment of traditionally marginalised members of the global community. Mass adoption might seem a way off, however if the last decade was anything to go by, mass adoption might well become a reality sooner than most people think possible.