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Crossing the Cryptocurrency Chasm

Taking a new technology across the chasm that separates the techie domain from the mainstream public is a misunderstood and underestimated task that all too often results in the demise of many great technical ideas envisioned but inadequately executed. Cryptocurrency is no different as a new technology with the potential to change human culture and create new trillion-dollar industries. Although cryptocurrency is over ten years old since the first bitcoin was mined on January 9, 2009, it is still in its infancy as a new emerging technology. Like other successful technologies that have come before, it will have to undergo the necessary metamorphosis to transition through the technology adoption lifecycle.

The technology adoption lifecycle bell curve describes the different audiences and their size in the marketplace. 68% or two-thirds of the potential and most profitable market is in the early and late majority. All new technologies are first adopted by the innovators and then the early adopters before the major challenge of reaching the majority. Laggards are the late adopters that push back on technology every step of the way. Each audience has a unique personality and distinct needs that must be understood for adoption.

The primary reason why most technologies fail to cross the chasm is a mistaken belief that the solution is just scalability. They believe that they just need to do more of the same thing to reach a greater audience. Understanding and meeting the different needs of each adoption audience is the only way to cross the chasm to mainstream adoption.

INNOVATORS
The innovators are the technologists. They are the programmers, nerds, and geeks that love technology for technology’s sake. Technology is a central interest in their lives, and they pursue new technology aggressively. When the innovators purchase technology, they do so to explorer it more so than to use it. The endorsement by the innovators is critical for the other adopting audiences. Innovators verify that the technology really works and that it performs as claimed.

EARLY ADOPTERS
The early adopters are the visionaries that are not necessarily technologists, but are very open-minded business people that can imagine, understand, and appreciate new technology. They can see how technology can solve business problems and they can relate the potential benefits to their own specific interests. Early adopters are typically very independent leaders that rely on their own intuition and vision. They want to see real business value in the technology, and they are core to opening high-tech markets.

EARLY MAJORITY
The early majority are the pragmatists and are driven by a strong sense of practicality. They relate well to technology, but they also want to see a useful solution with well-established references to prove that it works. The early majority represents one-third of the population and their adoption is fundamental to any substantial profits and growth.

LATE MAJORITY
The late majority are the conservatives that are not necessarily very comfortable with technology. They need more than just references but require established standards with lots of support. They want everything in place and running smoothly. They are not very forgiving of bugs in the technology, and they want a proven and mature solution that integrates well with the established ways. Profit margins are typically higher with this additional one-third of the market due to reduced selling costs and the already amortized research and development costs.

LAGGARDS
And finally, the laggards are the skeptics that don’t want anything to do with new technology. They don’t buy new technology directly but purchase it embedded in products, like anti-lock brake technology in cars, or geo-tracking technology in cell phones. Their motivation is typically based in the fear of missing out (FOMO). Their adoption of new technology, if any, is not to reap new user benefits or competitive advantages but to avoid being left behind. They can be beneficial to businesses due to their critical feedback for the continual improvement of products and services.

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THE CHASM

The major chasm in the technology adoption lifecycle is between the early market of innovators and early adopters who want new innovative and revolutionary things, and the mainstream market of the early and late majority who want complete solutions and convenience that work within the establishment. This leads to a very unsmooth transition between these distinctly different user types. This is where most new technologies fail to reach the mainstream market by thinking all they need is sales momentum, and not recognizing the necessary morphing required to meet the changing needs of their growing market.

Minor Cracks

There are also a couple of minor cracks in the bell curve for the technology adoption lifecycle. These include the additional needs of the early adopters over the innovators, and the late majority over the early majority.

Early Adopter Crack

The primary need at the stage of moving from innovators to early adopters is to take the hot new technology and translate it into a major new benefit. There must be some value to deliver to the marketplace. The solution doesn’t need to be perfect for the very forgiving early adopters in a very immature market. A “Killer-App”, as rudimentary is it may be initially, must show some user benefit to solve some problem in society outside of the technology itself.

In the mid to late 1970s, the personal computer was a hobby kit purchased and assembled by computer geeks. It wasn’t until the electronic spreadsheet, VisiCalc by Dan Bricklin, emerged in 1979 as the first killer-app that attracted early adopters for its potential business benefits.

Cryptocurrency finds itself today at this stage. Most major cryptocurrency applications are merely supporting the base technology. Mining hardware for faster calculations, wallets for coin storage, exchanges for buying and selling coins, and smart-contract platforms are all technology specific solutions. Cryptocurrency needs business solutions that business visionaries can relate to and benefit from. Minor progress is being made in this area with solutions like bitcoin payment processing for merchants from BitPay and Coinbase, but unfortunately there is currently very little demand for merchants to benefit from.

This crack is also evident in most cryptocurrency crowdfunding projects that present some unique technology idea but rarely have thought through a sustainable business model that delivers value to the marketplace to generate revenue and profits for the stakeholders outside of speculative trading. Post-funding performance metrics are often focused on the coin’s trading price. A project is considered successful if its current price is 2–5 times its opening price rather than if the project is or can be profitable.

Late Majority Crack

The second crack is at the stage of moving from early majority to late majority. This successful adoption must package the new technology with greater emphasis on simplification and convenience. The late majority is not willing or able to become technologically competent like it’s previous counterpart, the early majority. Most of the late majority will be infrequent users and will not use most of the advanced features. The new technology must become increasingly easier to use for adoption by the late majority.

This is the longest gap to conquer where the new technology becomes the establishment with well-defined processes and support infrastructure. It is no longer threatening revolution to shake up the apple cart but is seeking conformity for expanding its business partnerships with established solutions.

In the 1960s and 1970s all computer processing was done on mini and mainframe computers. The establishment was IBM. IBM was the safe bet, no one was ever fired for purchasing IBM solutions. Then came along the micro revolution led by Microsoft and distributed computing. As a micro programmer for Electronic Data systems, I was considered the black sheep of the corporate family. The personal computer was considered a toy, and no one took it seriously as an enterprise computing solution. And for very good reason with its infamous “blue-screen of death” that required frequent hardware reboots.

The personal computer (PC) maturation process took many years to develop dependable network communication, stable PC operating systems, robust PC business applications, and secure and safe networks. But the time came when Microsoft and distributed computing became the trusted establishment by the corporate world, and completely obliterated the once-thriving mini computing industry companies like DEC, Data General, Wang Laboratories, Apollo Computer and Prime Computer.

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The Chasm Challenge

Now let’s return to the major chasm separating the early market from the mainstream market, and separating startup technology companies from major profits. The majority adopters make up two-thirds of the market for substantial profits and growth often displayed in hockey-stick financial charts.

The early market adopters want a revolutionary change agent for a competitive advantage from radical discontinuity. Cryptocurrency purists are early market adopters that want to completely replace the world banking systems and government fiat currencies with a much fairer and less corrupt peer-to-peer electronic cash system.

Contrarily, the mainstream market wants evolutionary productivity improvements for existing operations. They want technology to enhance, not overthrow, the established ways. They want it to work properly and to integrate appropriately. This chasm is the difference between revolution and evolution.

This doesn’t necessarily mean a dilution of the new technology vision, but rather, a trojan-horse approach to market acceptance. You never change things by fighting the existing reality, but by building a new model that makes the existing model obsolete. Microsoft did not set out to eliminate the entire mini-computer industry. It focused on building a better solution, and time took its course naturally for eventual mainstream adoption.

Here’s the catch-22 in crossing the chasm, the early majority personality requires well-established references, but the early adopters don’t make good references for the early majority. They don’t trust the early market that wants to change everything and are typically idealistically opposed to compromise. The high-tech promoters of the early adopters are operating without a reference base and without a support base within a market that is highly reference and support oriented.

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THE CHASM SOLUTION

The solution to crossing the chasm lies in presenting the new revolutionary technology first as an evolutionary improvement to build and leverage relationships of trust in market segments for small successes. Building small vertical footprints of success within a global market enables continual expansion towards the end goal of mainstream adoption.

The ability to reference a successful implementation makes the process of opening new markets exponentially easier and significantly more cost effective.

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TECHNOLOGY ADOPTION SOLUTIONS

Innovator -> Early Adopter Crack

Early Adopter -> Early Majority Chasm

Early Majority -> Late Majority Crack

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CRYPTOCURRENCY TODAY

The following two charts show the relationship of the Technology Adoption Lifecycle and the Hype Cycle plotted together. The cryptocurrency craziness and highly volatile trading prices are represented here through many cycles of the “Peak of Inflated Expectation” and the “Trough of Disillusionment”.

As the cryptocurrency industry matures and develops real sustainable business models that create real utility for cryptocurrency, this Expectation Curve will stabilize toward the “Slope of Enlightenment” aligned with the early majority, and on to the “Plateau of Productivity” aligned with the late majority.

Today cryptocurrency is in the early stages of the early adopters. It hasn’t even arrived yet at the major chasm that separates the early adopter market from the mainstream majority market. The immediate goal of cryptocurrency should be in building real business cases beyond the marketing hype of speculative trading in order to move closer to early adoption by business visionaries.

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CRYPTOCURRENCY ADOPTION

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PERSONAL COMPUTER ADOPTION

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INTERNET ADOPTION

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CRYPTOCURRENCY EARLY ADOPTER SOLUTIONS

We are starting to see some, although a very small percentage, of cryptocurrency projects that provide real utility to deliver value to the marketplace with a sustainable business model to generate revenue and profits for the stakeholders. These are the types of projects that will attract business visionaries as early adopters.

I must also mention that there are many cryptocurrency projects that use tokens in businesses that some people consider illicit, like gambling websites. Mainstream adoption requires a marketplace value that benefits society, which these types of websites fail to deliver.

ETHEREUM UTILITY

The Ether Coin (ETH) is the internal currency of the Ethereum platform. Developers pay Ethereum a processing fee, called Ether Gas, for running their Dapps. The only accepted payment method is the Ether Coin. This requires developers to purchase Ether coins to pay for the utility of running their application on the Ethereum platform. The Ether coin has real utility buyer demand. There are other competitors to Ethereum with smart-contract solutions like EOS, Stellar, Cardano, NEO, Tron, QTUM, and its own Ether Classic.

Although the Ether Coin is a legitimate utility coin that creates its own internal buyer demand, a very large majority, possibly 95%+, of its buyer demand still comes from speculative traders. Successful coins and tokens of the future must generate most of their buyer demand from some internal utility.

This will solve a major cryptocurrency problem with price volatility as the industry matures, like gold and silver that have most of their real utility buyer demand for manufacturing, medical, and jewelry but are still traded by speculators for a smaller percentage of their buyer demand.

NEXXUS UTILITY

Every shopping transaction drives buyer demand for the Nexxus token. It is not dependent on speculative trading. Merchants offer a percentage of the sale to the shopper in Nexxus tokens. The tokens are purchased from the public exchanges with merchant funds, which they gladly pay to get and keep new customers. Nexxus Rewards has a unique shared rewards program allowing shoppers to collect and redeem points at any merchant like cash.

Nexxus is a good example of the Trojan-Horse strategy to cross the chasm to mainstream adoption. Nexxus Rewards is an evolutionary improved marketing solution that includes a built-in revolutionary cryptocurrency payment gateway. When the public is ready to start using cryptocurrency to purchase goods and services, all Nexxus merchants will automatically be able to accept any of the top 10+ cryptocurrencies.

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CONCLUSION

Cryptocurrency is a new emerging disruptive technology in the very early stages of mainstream adoption. It is where the personal computer was in the early 1980s with green screens and floppy drives.

Cryptocurrency’s next objective is to deliver real business value to the marketplace with real utility applications. Then it must be prepared to play nice within the establishment to obsolete the existing model. And Finally, it must become very easy, safe and convenient for most people.

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ABOUT THE AUTHOR

Medium

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