Blockchain is getting even stronger
The blockchain business is maturing regardless of the crypto-asset price. The tendencies can be found from 1) use amount of blockchain, 2) influx of assets and talents in the blockchain field, 3) advance in technology, and 4) advances in regulations.
[caption id="attachment_2128" align="aligncenter" width="1020"] Chart 1) Blockchain Transaction Count (30d avg) (*Source: Coinmetrics)[/caption]
First, the On-Chain Transaction that indicates blockchain usage volume is keeping up its rising trend. The chart above shows the number of daily transactions occurred on Bitcoin, Ethereum, EOS network since 2011. As you can see, the tasks that blockchain is handling is gradually increasing, and it especially surges when the major protocol enters into the scene.
[caption id="attachment_2130" align="aligncenter" width="669"] Chart 2) ICO Funding Trends (2014–2018) (*Source: Coindesk ICO Tracker)[/caption]
The influx of talents and funds is also accelerating. The chart above shows the number of the conducted ICOs and the total funded amount by year. Even in the 2018 when the bearish movement resumed, the amount funded from ICO topped at $16B range, which increased by 300% compared to the last year.
According to the ‘US Job Report 2018’ shared from LinkedIn, the recruitment postings for blockchain engineers jumped by 3,300% from last year, achieving the 1st place for the highest number of new job position openings by surpassing AI field. Along with the new projects, the major players in the field including ICE (Intercontinental Exchange)’s Bakkt, Facebook’s Libra are accelerating its entry into the market.
The blockchain technology development is showing some visible progresses as well. Ethereum has successfully finished Constantinople hard-fork this year, and preparing for Serenity upgrade, which enters into stabilization phase. The progress and results of research on projects like Solana and NEAR that seek to greatly improve the scalability problem are disclosed. And DAG (Directed Acyclic Graph) based projects are getting ready for the proactive launch. In addition, various technical studies are being actively conducted to expand the industry, such as with the Interchain Technology that supports the communications between different chains, and DEX performance improvements, etc.
[caption id="attachment_2132" align="aligncenter" width="1020"] Image 1) The 39 Members of the FATF (*Source: FATF official site)[/caption]
On top of everything, the global regulation environment is settling down. In order for the finance-related technologies like blockchain to be adopted by the public, a clear regulation environment is a must be followed. With FAFT (Financial Action Task Force)’s recommendations shared in last June being a starting point, the legislative and regulatory maintenance in crypto-asset in the 39 registered countries started proactively. Regarding the disclosure level of the recommendation, the regulation compliance by countries seem to work as a major competitive edge in the near future. Considering the probation period, the first half of next year will be the time when blockchain-related global regulation environments will solidify the ground, and then the attempts of the global companies’ entry into blockchain field will be ever accelerated.
These factors indicate that the blockchain and crypto assets can mature into a mainstream technology at any time, and getting ready to draw the public demands.
But there is no one who actually uses blockchain.
There is one thing that makes those growth indicators in the blockchain field look pointless — it is still very hard to find people who use blockchain and crypto assets as ‘real users.’
People who are talking about the blockchain and have experiences in it are mostly 1) developers, 2) node operators, or 3) investors. Developers are those who develop platforms and dApps for users, and node operators take care of the network operations. Last, investors are the ones who invest to the chances of the increase in the future demands and values of the tokens. So all of them should not call themselves ‘users,’ and they are rather the ones who are waiting for the real users to join the pool.
[caption id="attachment_2134" align="aligncenter" width="1020"] Table 1) DApp users stats (‘19.08) (*Source : Stateofthedapps)[/caption]
Let’s take a look at the actual user data of major networks. As of August 2019, the dApps that are based on Ethereum has 203,000 users, EOS 71,100, Steem 10,980. If calculated per-dApp wise, then the number the users can be mathed out into 100~200 range. Considering that the number of people who participate in the Ethereum node exceeds 7,000, you can see the gap between sufficiency in users over suppliers even more clearly. If the market capitalization is evaluated as dApp DAU’s Multiple, then it shows that one user in a blockchain is worth more than $50,000, a very peculiar situation.
[caption id="attachment_2136" align="aligncenter" width="1020"] Chart 3) The Biggest pain points for Dapp developers 2019 (Multi Choice Questions) (*Source : Fluence Labs 2019)[/caption]
Since there are no users, the development demands for end-users also decreases, and this then it results the absence of the users again as well. According to the survey conducted among the dApp developers, the biggest painpoint of their choice was ‘the insufficient numbers of blockchain service users (68%).’ This indicates that no matter how great their business plans or development resources are, there are just a too little number of the users (with minimal knowledges/experiences in wallets and dApp browsing).
If supporting only certain assets by promoting agreement algorithm and decentralization like Bitcoin is the ultimate goal, then the miners (node) and investors can be considered network users just like the real world’s gold environment. However, on the post 3rd generation blockchain network that supports and operates the dApps running smart contracts and various token structures cannot avoid the phenomenon that which the lack of users leading into the lack of the reason of the network’s existence. Why is the ‘lack of the users’ is such steady phenomenon then?
A Market that which faith and technology precede users.
“People ignore design that ignores people” said Frank Chimero. Chimero’s quote indicates that the designs that bring the planner’s (or provider’s) values and logics forward that of the users will get neglected by the users. But I can witness something very similar is happening often in the blockchain business scenes. Blockchain’s major values and logics are preceding that of the users.
First, users are often sacrificed for the important values of blockchain that can be represented as ‘decentralization’ and ‘on-chaining.’ For example, on the ‘Blockchain Trilemma*,’ users are always pushed away from the priorities. And users often bear with the inconvenient and unfamiliar user experiences like ‘Self Resource Allocation’ or repetitive ‘Outlink.’
But it doesn’t necessarily mean that everything on the blockchain needs to be decentralized or on-chained for the sake of the ‘new blockchain-based user value.’ Users will have no problem experiencing crypto-asset rewards, token owner benefits, voting, copyright/game item ownership even with the currently available databases or hybrid types of services — or the user experience can get even better with those alternative services as well. At the current stage where the users are not fully familiar with the blockchain technology itself, focusing on user values experiences seem to have more importance than achieving technical perfection.
* Blockchain Trilemma: The concept that explains the difficulties in simultaneously achieve three key values in building a blockchian network. The elements are 1) scalability, 2) decentralization, and 3) security. The conecpt was first mentioned by the founder of the Ethereum, Vitalik Buterin.
[caption id="attachment_2138" align="aligncenter" width="1020"] Table 2) 6 Subsystems for Quantifying Decentralization (*Source: Balaji S. Srinivasan’s Medium)[/caption]
Even if the values and usabilities in decentralization are compromised to a certain level, there still remains a question on the ‘proper level of decentralization.’ The question leaves many rooms for discussion in the market as well. When assessing decentralizations, everyone has different standards like node participation range, numbers, distribution, anonymity, etc. There have been some attempts like ‘Decentralization Quantitative Assessment Model (Table 2)’ suggested by Balaji S. Srinivasan that has been devised to quantify the level of the decentralizationm, however, all of these attempts are just ‘relative measures’ between networks, meaning that it cannot suggest the absolute measure or standard. The discussions on the proper standards to measure decentralization in the field seem to continue for a while. Nonetheless, the users actually are more interested in ‘how much did I earn and how easy is it use’ rather than the fierce node competition or on-chain votings happening on the blockchain side.
The blockchain wallets that forces users to personally store private keys without users’ options became a huge burden to the users as well. Technically that can be an expansion of users’ individual authority and roles. However, users ironically start using blockchain services with more anxiety that they did not previously have with the currently available Internet environment. So eventually, many users end up storing their private keys into centralized clouds or managing their assets with even heavier service called centralized exchanges. Users prefer a bank safe that comes with friendly instructions and options, rather than a suspicious personal safe that says ‘everything is on you.’
And the difficult blockchain features and terms are making users even more confused. Alex Vishmidt, UX Consultant criticized that the blockchain jargons are making the communications very costly and exhausting, and Clay team even described these problems ‘Deadly Sin of Blockchain.’ We see the ultimate and core features of the service fading away soon once we witness the list of terms like Node, Staking, RAM, etc. in the real user interface. There is no one who will get willing to learn about distributed ledger technology or cryptography seriously. And on top of everything, people just cannot get attached to something that they find. So we will seriously need to change the communication strategies of the service providers just for the sake of the blockchain mass adoption.
The complicated charging models implemented under the good name of ‘Token Economy’ is also an another hurdle. For years, Internet services including cloud computing have been developing some reasonable charging systems that can be implemented into the service while keeping the user experience satisfactory. As a result, many easy-to-understand and reasonable models like different subscription models, post-payment proportioned to the used amount have been introduced. And in most cases, because the service providers want to focus on enhancing the UX at the initial phase, these options are often applied after the critical point where the service has sufficient network effect.
However, with some great excuses like token circulations, circulation pace control, malicious conduct prevention, the current blockchain network and dApps often choose to start with complicated deposit and charging policies even at the early phase of the service.
A product can test its various monetization or expansion plans once they get many users’ attentions. However, once the service is neglected and forgotten by the users, then it will never get a chance to prove their hypothesis or visions despite the service excellence. The same applies to the Token Economy. The economy can have its own meaning when it has enough number of citizens to serve.
The innovative values and features of blockchains must be carried out. The values that decentralized networks can deliver — represented as trustlessness, digital democracy, data ownerships — are the essentials for the resolution and development of the society’s problems outside the internet. When blockchain gets recognized more familiarly to more people in the future, the decentralization itself will then become the important user value, and the node opening and on-chaining will be the musts, not the ones demanding compromise. And it will become more familiar for the people to store and manage digital identity and assets on their own.
But to make more of progress, we need to take our strategy more in detailed steps. The blockchain service providers need to invest enough effort and time so that the current Internet users can get familiar with the blockchain’s concepts and technical elements. In order to talk to the carpenters, you need to talk like a carpenter. So if we want to talk to the users, we don’t need to sermon on the blockchain future. Instead, we will rather need to start breaking the ice with the convenience and entertainment that the users can enjoy immediately.
LINK, Blockchain Designed for Everyone
[caption id="attachment_2140" align="aligncenter" width="300"] Blockchain Designed for Everyone[/caption]
As LINE developed into a mobile platform with hundreds of millions of people every day, LINK aims to become the Blockchain Network that can be easily used with regular public in their everyday lives. We do not hesitate taking down the elements from the priority if these blockchain elements may hinder user values, and focus on the things that can encourage as many users as possible to engage in the LINK Network. The directions that LINK pursues can be divided into 1) Crypto Asset, 2) Product, and 3) Network aspects.
First, LINK (LN), the native coin of the network was designed to be distributed to mass users, not to a few numbers of investors or nodes. Based on the contribution, we would like to provide the experience of which the users can acquire and use LINK from the daily-used services. With this, we want to resolve the issues regarding the imbalance and unfairness that the investor-centric distribution method had, and want to see the seamless transition from the Internet users to Blockchain users. We expect that the securing more of blockchain users can make more of good dApp developers to get involved in the network and create more of user values — which can then turn into a virtuous spiral.
Allowing many types of services to handle LN is beneficial in terms of the asset usability because various types of usabilities like benefits for payment/ownership, voting, etc. can become available not just within the protocol, but in a lot more of the services as well. The previously available crypto assets had a strictly limited usability depending on the token types — in most cases, there were nearly no venue for usage available unless it was used for the network usage. However, LN’s usability has a continuous scalability. Meaning that the network demands and even the demands for the various affiliated services can positivey affect the continual growth of the asset.
The dApps that are being developed on LINE’s are being built with a more weigh on providing tangible values to users than overworking on excessive on-chaining. The blockchain as an infrastructure will stay on the subtle background layer, and the users will be able to appreciate the services’ ultimate features and values.
[caption id="attachment_2142" align="aligncenter" width="1150"] Image 2) LINK Network Components[/caption]
LINK Network is designed for built as centered to the scalability for the large-size servicces and usability of the development entities. LINK Network first can build mainnets by services, and support inbetween-mainnets connection protocol (Interconnected Blockchain Protocol) so that services can get guaranteed to get alllocated with their own transaction bandwidth. Also, we will be providing GUI (Graphic User Interface) supporting Dev Console and many other various middlewares so that the developers can easily develop without having to directly communicate with the protocol layer. The initial charging structure will be minimized, so that the developers’ learning cost for blockchain can be dramatically reduced, and then allow them to produce a variety of blockchain use cases on the LINK Network.
As you can see from the above, the strategic directions of each element of LINK Project is directed into the “Popularization.” By popularization, it doesn’t just mean the population user base from LINE services, yet to further demographics covering all the users on the Internet. We want to focus on creating and delivering the experiences that everyone can understand and get willing to use.
[caption id="attachment_2144" align="aligncenter" width="1020"] Image 3) Internet Quote (by Dick Gephardt) (*Source: azquotes)[/caption]
There was a technology that has been speaking of the same elements of decentralization, digital democracy, and censorship resistance — and that is the Internet. And the world changed into a more transparent and democratic world after the Internet was introduced indeed. However, the changes that Internet brought wasn’t just established with the beliefs and technology of the early stage of the Internet. The Internet team had put a tremendous amount of efforts to show Internet’s use value and usage to persuade the general public. And the users of the Internet did not use the internet to realize censorship resistance and digital democracy. It was solely because the Internet was easy to use, fun, and saved time and money.
Internet eventually positioned itself the most successful infrastructure technology in history and have been disassembling and recreating (unbundled) the entire industry field. And I presume that blockchain will can do something similar to the Internet as well. However, at this time, blockchain will make a world where the value and smart contracts beyond the information can boundlessly flow and circulate in the world. And in that world, we be able to share an experience that we can trade all kinds of assets on borderless basis, and make contracts without contract papers. Also, we will witness the entirely new type of organization and collborative methods via the DAO (Decentralized Autonomous Organization). Through the progress, many industries may get disorganized and/or reorganized, and even the roles of the corporations and the nations will be redeinfed as well.
And in the midst of those changes, the world will reform itself as more transparent and democratic one. As we are going through the early stage of the change, I hope the general public can interact with LINK and accept the experience as the trigger to naturally embrace and easily experience the new Internet environment called Blockchain.