Square cofounder Jack Dorsey said a hackathon that allowed him to use bitcoin (BTC) to buy the proverbial cup of coffee inspired the user experience of the company’s peer-to-peer Cash App.
“We wanted to make money as simple as sending an email,” Dorsey said of the principle driving the consumer-focused app during the Consensus 2018 conference in New York on Wednesday.
At the same time, understanding consumer preferences is a two-way street. Seeing users trying to buy and sell bitcoin using Square’s technology was what led it to become the first public company to enable the buying and selling of crypto, according to Dorsey.
Users “showed their intent,” he said. “We took that as a lead, wanting to learn deeply and increase our appetite for risk.”
To be sure, consumers are increasingly interested in the world of cryptocurrency, if only because of the mainstream media coverage of its meteoric rise. In 2014, fewer than two percent of eToro’s social trading network users traded bitcoin, but today 80 percent do, said founder and CEO Yoni Assia. “All our communities are fascinated and inspired by cryptocurrencies.”
At the same time, that doesn’t mean consumers will eagerly jump on the decentralized app (DApp) bandwagon if the user experience isn’t equal to what consumer apps already provide.
“There will be an ‘iPhone moment’ for DApps where it’s drop-dead simple and we can consume [them] in almost the same way as regular applications,” Wilson said.
“One of the hardest lessons for consumer software to learn is that your product is not important to your users,” said Dieter Shirley, cofounder of the oft-mocked — but financially lucrative — CryptoKitties. “As soon as we expose consumers to [the underlying technology], we lose them.”
From Mainstream to Blockchain
Still, a number of successful consumer-focused companies are taking mainstream apps and moving them to the blockchain. Messaging service Kik’s founder Ted Livingston described his company’s decision to do so as a way to avoid being “copied and crushed” by competitors like Facebook.
In similar fashion, crowdfunding site Indiegogo’s founder Slava Rubin predicted that all crowdfunding transactions will move to the blockchain. “It’s where the puck is going,” he said.
A growing number of decentralized apps are gaining traction, including Graphite, an alternative to Google docs that tracks the performance of business websites and applications, among other services; Stealthy, a fully decentralized secure messaging app; and a number of decentralized cloud storage solutions that scatter users’ files throughout the blockchain.
However, Fred Wilson, a partner with Union Square Ventures, said today’s blockchain user experience — even buying and selling CryptoKitties — is still “not how a normal person expects things to work.” And while financial services is “ripe for blockchain,” in the words of DX Exchange cofounder and CEO Daniel Skowronski, the “speed and execution isn’t quite there.”
That soon will change. “There will be an ‘iPhone moment’ for DApps where it’s drop-dead simple and we can consume [them] in almost the same way as regular applications,” Wilson said.
What Will it Take?
If the industry is waiting for an “iPhone moment,” one thing it will need is a centralized marketplace. On Wednesday, Blockstack cofounder Ryan Shea announced app.co, an “app store for the decentralized internet” that features DApps from a variety of platforms grouped by function, not protocol.
“It speaks to the consumer about the value that can be driven to them independent of the underlying platform,” Shea said. “We still need to deliver on these promises of…. providing value to the real world, not just the people in this room. That has yet to catch up.”
Companies working in the space also need to help educate consumers, Dorsey said. Square includes in its applications a link to “My First Bitcoin”, an ebook explaining the technology and its underlying principles.
Once they understand the benefits, consumers may ultimately find some of the more esoteric aspects of decentralization appealing. CryptoKitties’ Shirley argued that non-fungible digital assets could grow beyond collectibles to include secure credentials for badging — at first on social media, but perhaps someday for “being pulled over by a police officer and being able to prove… you have a license without having to share your name and address,” he said.
At the same time, there are pitfalls: “Imagine we put real estate deeds on the blockchain and you lost your [digital] wallet. Not only can you not live in that house, no one in history will be able to live in that house. That’s the architecture of most blockchain solutions,” Shirley said.
Litecoin founder Charlie Lee reminded his audience that “we’re still in the early-adopter phase. People don’t really want to understand the technology on the back end. They want the user experience to be simple.”
Companies need to carefully consider their goals. “Blockchain is not for everyone, and not for every use case,” said Dany Fishel, executive vice president of Kin Partnerships. A key consideration: ensuring that all stakeholders can be incentivized using the economic models that drive blockchain adoption.
Decentralization just for decentralization’s sake could be a “massive head fake,” Kik’s Livingston said. “Consumers just want it to be fast and work well. What they do want is innovation.”
Orbs cofounder Uriel Peled put the charge for DApp companies more clearly. “Protocol guys need to bring to the table something that works,” he said.