As 2022 began, we faced a world of unknown possibilities, driven by an ever-expanding vista of exciting new technologies. How will these cutting-edge technologies be adopted, moving from their eccentric inceptions to widespread commercial acceptance?
Five Stages of Adoption
In his book, Crossing the Chasm, Geoffrey A. Moore presents a model for the stages of adoption of new technology. The model shows these five levels defined by the psychographic features of consumers at every stage, from the initial innovators to the very last to adopt.
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/Skeptics (16%)
Technology adoption for any organization or institution ultimately relies on cost/benefit analysis. This evaluation is determined mostly 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 for use, ease of employee use, length of time needed and effort spent in learning to use the new tech, public opinion (perceived or voiced) and more.
Certain impediments from any or all of these categories can create a chasm that slows progress. These breaks are usually seen between two stages/types of adopters.
As shown in the linked diagram above, this marked chasm tends to occur between Visionaries and Pragmatists, marking the entrance into the mainstream market. The reason for this, according to the author of Crossing the Chasm, is that visionaries and pragmatists adopt disruptive tech products for very different reasons. Visionaries enthusiastically embrace major change based on future projected rewards while pragmatists are more cautious, accepting change only incrementally for a perceived safer transition. Hence, the bridge between these two groups is more like a leap than a smooth evolution.
Every organization faces challenges in adopting new technology, but the larger the organization, the slower the adoption will be. In direct contrast, most private-sector organizations of a smaller size embrace a culture of experimentation, encouraging innovation by rewarding performance directly in equity, bonuses and salary raises.
One of the greatest innovations in technology of the 21st century, the paradigm-changing public blockchain protocol, is now ushering in vast possibilities across diverse industries around the globe.
Peer-to-peer, auditable, transparent and secure cryptocurrency introduced a way for individuals to exchange value outside the legacy banking system. Blockchain technology enabled the first peer-to-peer “digital cash” network in which transactions could be verified without a centralized third party’s involvement (such as a bank or government) and with perfect data integrity. This innovation dramatically expanded access to alternative financial services to millions of people without bank accounts around the globe and spurred a worldwide financial revolution. Following our tech adoption diagram, it’s easy to see how the excitement of such an innovation carried the first two groups of Innovators/Tech Enthusiasts and Early Adopters/Visionaries into early usage.
Despite complex initial processes for “mining” (running Bitcoin software), buying and trading Bitcoin (the software keys accessing Bitcoin software), these early market enthusiasts supported its slow and steady growth. Following the introduction of Ethereum, the first smart contract-compatible blockchain and distributed computer processor in 2014, blockchain enthusiasts grew and began to welcome hundreds, expanding to thousands of “altcoins” (software keys to public blockchain protocols) with various actual and projected uses.
According to a report by Crypto.com, the number of cryptocurrency users grew to 221 million by June 2021, with the market almost doubling in the first half of 2021. Currently, the total cryptocurrency market is valued at about $2 trillion after hitting an all-time high of about $3 trillion. However, despite the enthusiasm of early adopters, user experience for most blockchain-based applications remains friction-filled and overly complex for the average web user. Usability is the next frontier for blockchain technology builders to address in order to bring this technology to the masses.
For blockchain software to enter the mainstream market, it will need to 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 possible only through a next-level of mass understanding, layering and applicability of the many use cases for blockchain technology. These now quickly evolving worldwide use cases include:
- DeFi (decentralized finance) platforms facilitating new smart contract-enabled lending, borrowing and yield farming for gains unavailable in traditional finance. Add to this financial products formerly only available to institutions such as interest rate swaps.
- NFTs (non-fungible tokens) to securely denote the authenticity of virtual as well as physical art, luxury goods, collectibles and tradeable elements of virtual reality platforms.
- Web 3 applications, including decentralized social networks, gaming platforms and video/file-sharing and storage options free of third-party censorship and size limitations.
- Recording real estate sales via blockchain smart contracts, automating tedious processes like escrow, which will eliminate third parties.
- Secure, immutable 100% uptime tracking of important public data, such as voting, corporate CO2 emissions and other important records.
- Supply chain product lifecycle tracking to ensure consistent delivery of goods and services.
As the new year begins, private institutions and governments worldwide seek new and innovative ways to upgrade technology, contending with new challenges to structural issues made apparent over the last two years. The commercialization of public blockchain protocols will be a top contender to leapfrog and modernize legacy systems for this global change in 2022 and beyond.