Laks: We are here today with Melissa. Welcome to Blockchain Zoo, we’re excited to have you here to discuss your thoughts on mass adoption of the blockchain technology. We have spotted you and your insightful presentation about User Adoption of Blockchain and Crypto. How have you come to so many insights, is it based on your consulting work with various projects across the globe?

Melissa: I guess it first started as being a user myself and having a lot of different hands-on experiences and using different types of blockchain technologies and applications. I’ve also been a business consultant for a long time doing a lot of business development with entrepreneurs and small businesses. Taking technology solutions and figuring out what’s the best solution for the business case that we’re trying to solve. So I have a lot of knowledge and insight on how people actually adopt new tech systems into their everyday experiences. And so I took that and translated it to apply to what I do now which is specifically helping to build out blockchain ventures.

Laks: During the meet-up, you mentioned that you were part of the amazing crypto ecosystem here in Ubud (Bali, Indonesia) when you paid the rent, got paid for your work and were purchasing different goods with cryptocurrencies. It was during the peak price time. Is this ecosystem gone just because prices dropped?

Melissa: I would say the ecosystem started well before the prices started skyrocketing. It was back in the days when bitcoin was around $300 – $400. The merchant adoption continued to grow during that time, and the price was a lot more stable and less volatile. I think we got up to over 100 merchants accepting it, pushed by a few key people in the community. That’s a lot of very admirable work on a non-profit level actually. Educating people, teaching Bitcoin 101 classes, teaching businesses how to get set up, and that for me was such an amazing experience to be part of it and see it grow.

It grew even more and more when the peak actually happened. You look around the room, and it’s packed with people. You know, all kinds of people coming out of the woodwork and who are interested in cryptocurrency. Since then I would say that what really impacted the change in the growth of the ecosystem, what slowed it down, was a few factors. One of those factors was the scalability of the technology. As it became more popular and the network became more used, the transactions became slower. They became more expensive and so it became not as practical to use it. As well as, people wanted to hold it more, and so it became more of a store of value than a means of exchange.

And third, there is a regulatory aspect of it where the Indonesian government actually implemented an existing law that said that you could not use any other currency besides the fiat currency IDR to make payments. And so the ecosystem came crashing down once that got implemented.

Laks: As your business activities are going in the same tempo and direction, I assume that decreasing hype did not spook you off and you clearly see the value of technology beyond the cryptocurrencies. Mass adoption brings a question to mind, who are the users of the technology? I bet there are a dozen including several bigger groups. How would you classify those groups?

Melissa: When you talk about the topic of user adoption, the big question that you framed was who are the actual users. There’s the ground level peer-to-peer like you and me who are holding bitcoin. I might pay you for something a bitcoin or vice versa. So that’s one thing for user adoption from the means of using a payment currency. But I like to view it as a vast landscape of users. That includes let’s say institutions. So we go from the end users/consumers like you and me on the ground to the institutions, let’s say governments, for example.

So governments could implement using some kind of blockchain implementation so that they could start adopting it into their systems and their citizens could eventually start using it too. If you look at more of an institutional level again, you can look at private companies and enterprises who are looking to integrate that into their systems. Like for example, even the huge media giant Facebook is exploring implementing a cryptocurrency into their WhatsApp and Messenger platform, potentially into Instagram, and creating their own Facebook coin which would have huge implications because they have over a billion users in their network. What would that do to impact mainstream adoption?

The caveat to be paying attention to though is not only who are the users but what are they adopting. Are they adopting, for example, a centralized digital currency that’s running only on their closed network like Facebook? Or are they adopting a decentralized cryptocurrency like bitcoin for example, that runs across multiple nodes and anyone can participate?

Laks: Who do you think will be the first to adopt the technology and who will be the last and why?

Melissa: I think we’re already seeing adoption on the ground on the peer level. But the first people to really adopt it on a more massive scale are the ones that really need it. Because based on intuition and also what I’ve seen trying to get people to use new tech, I feel there is a resistance. There’s a lot of friction when people are adopting new systems. Even myself, when I have to download another messaging app or another payment app. There’s resistance, and so there needs to be a sense of urgency and need.

What I’m seeing now in the space and also looking at the statistics, the high levels of user adoption are happening in countries where they really need it. For example, countries that are serving an underbanked or unbanked population that don’t have access to more legacy banking systems of ease. Compare to places that I’ve spent a lot of time, like in the US; I love it there because the financial system is so easy and it’s set up, and it’s got all these kinds of apps that you can plug into and automate and sync, and it’s a seamless experience.

But if you go to a different type of country, lesser developed country, like Indonesia for example, you don’t have that same level of banking technology that is a seamless experience. It’s getting better and better, but I think that’s why the people who don’t have access to it especially like Venezuela or the Philippines, we see more massive usage of bitcoin as a cryptocurrency or other cryptocurrencies in those countries. Where apps like Coins.ph is able to accumulate 5 million users for their application and that involves some component of cryptocurrencies. So those are the ones that I feel are going to move faster.

Laks: Yeah. Because they need it more. Right. So in order to have benefits from using a fax machine, there should be at least two owners of the fax — the same with blockchain. We need a certain bulk of active users in order to make it work. What are the main roadblocks in your opinion for enterprises, institutions, blockchain builders and the public?

Melissa: I think there’s quite a number of general challenges that people face with the block mass adoption. One is that there is a huge learning curve and people need to take time to kind of go down the rabbit hole, understand what the technology is, how they can benefit, how they can implement it. There’s a comedian John Oliver who did a show about cryptocurrency, and he singles out this little skit about that one guy in your family who is really into bitcoin and won’t stop talking about it, but everyone else has no idea what he’s talking about. And so I think that what happens is like one person in an organization or a community will get excited about it, read about it, understand it but then everyone else doesn’t know what it is and how to relate to it.

And again they might have resistance to learning something new. So a) education is like is a base challenge to get through and then b) is the technology itself. The technology is not scalable yet, or it’s not ready for full implementation and mass adoption. That’s where it’s going to buckle if mainstream does start using it as much as let’s say Visa or PayPal is used. Then it’s going to crumble in itself.

So there’s a lot of work and building and testing to do to help with mass adoption as well as it’s about what the interface looks like. There’s a huge lack of great UI/UX, user interface design and user experience design, that has happened in this space because I think a lot of times in new tech it’s the developers that really push it forward first. They move fast, and they don’t necessarily have the same mindset as designers have. And so I think once we see some designers coming into it and addressing the look and feel, and the experience of interacting with blockchain to the point where the users don’t even need to know what blockchain really is thus eliminating the first issue of the huge learning curve. I think that will help a lot.

Laks: There are so many legitimate teams, who built an interesting solution, seeing the problem first and then finding a good tech blend for solving it. Off the top of your mind, where is mass adoption actually happening? And where are Dapps being used actively?

Melissa: So from the research that I’ve been doing and like scanning the news and reading the statistics, I see there’s a lot of action that’s happening on the enterprise and institutional level. About 25% are actually investing in blockchain right now or plan to. And that number is continuing to grow. What version of blockchain technology is going to get implemented still remains to be seen. But from a more decentralized tech and a cryptocurrency level, what comes to mind off the top of my head is what Dash is doing in Venezuela, for example.

So oftentimes with user adoption on the ground where you’re looking at merchants and payment solutions, there’s this chicken and egg scenario that happens. What I mean by that is, let’s say you want the mass adoption to happen on the ground but the merchant is thinking: ‘OK, I want to accept this cryptocurrency, but there’s nobody there to pay with it, so why would I set up that system, why would I invest in that system?’. Whereas the users are saying: ‘OK, I have a cryptocurrency and I want to spend it, but there are no merchants that want to adopt it’. So what comes first, the chicken or the egg? What is going to stimulate this is the needs that come from both sides.

For example, Dash is putting a lot of efforts on the ground to help solve a problem in Venezuela where their current fiat currency is experiencing hyperinflation and instability. They’re actually growing the merchant user base. In November they had around 2,000 merchants, and now they have about 5,000. So they’re actually putting a lot of efforts on the ground, their teams really get out there and interface with real users and real retail points. It’s going to help in terms of the payment use case.

I just want to make a point here. When we talk about user adoption, it’s actually a really vast landscape that we’re looking at. It will be helpful to kind of categorize user adoption and what type of technology we’re talking about. Are we talking specifically about the user adoption of the money use case and a cryptocurrency for payment? Or are we talking about blockchain protocols as a whole and the blockchain technology? Or are we talking about decentralized applications like Dapps? So there’s a lot of different little areas where you need to differentiate.

For example, Daaps, if you go to a website called stateofthedapps.com, they list a lot of statistics about how many Dapps are existing in the space. There are over 2,500 Dapps that are being actively used, some more than others. But when you look at the statistics on how many users have been using a particular Dapp in the last 24 hours, some of the highest used ones have less than 2,000 people actively using it in the last 24 hours. And that’s based on different blockchains. So if you look at that, you can really ask – where is the mass adoption actually happening if you only have less than 2,000 users?

If you look at the stats on different cryptocurrencies, out of 2,000 plus cryptocurrencies only 20 of them have more than 1,000 active addresses happening in a 24 hour period. So that just puts things in scale, what that really looks like. Of course, bitcoin is one of the most active ones. I think I saw that the stats were like over 600,000 active addresses. So it’s really interesting to see the scale and look at the real numbers when we talk about this.

Laks: Instead of just what you get as the first impression when you see those first numbers and then how many are actually being used in the end. So I am sure there are also many worthy projects which did not manage to run ICO or will not succeed much as the hype is evaporating. What is your vision for those start-ups? How will they proceed? Will they flourish or is the moment gone?

Melissa: Hopefully there are the startups that have managed to either secure funding and make sure that they either have cashed out or have held a stable coin through a bear market and still have funds remaining from the ones that they raised during ICO. The ones who haven’t done an ICO yet and they’re wanting to still gain funding for their ICO project or their blockchain project in general, the landscape is kind of changing so that the demands of investors are becoming a bit more stringent. The market sentiment is still pretty cold. It’s starting to warm up again, but we’re going to see that we need to learn from the past. And we don’t have much of a past because it’s so new. But learning from the hype and from the level of quality of projects that were able to gain tens of millions of dollars based on just an idea or a white paper with no prototype and with a kind of an unknown team or some of them even full on scams, you know we need to as a whole raise that quality.

Laks: You also mentioned that at the end of 2017, statistics showed that there were 18 million users participating in the cryptocurrency ecosystem. Now they show that there are 35 million users. That’s a substantial rise of 94% more users this year alone. Despite the bear market! How will you explain this trend, are those all active users?

Melissa:  It’s hard to get very accurate statistics on how many users are in the space. But based on that research, I was looking at how many new addresses were being formed, how many new accounts at exchanges were being formed. When I read that I was actually astounded. I thought everyone was kind of fleeing the scene, moving on and saying bitcoin is dead or crypto is dead. Sometimes the media is very distorting in what they show. When you look under the hood and see stats like that, I can only think that a) the speculators are actually excited during bear markets because that’s their time to buy. You want to buy low and sell high, that’s the general strategy. And the other aspect b) is that because of the hype more people in the mainstream, and this is just my theory, more people in the mainstream are familiar with it and still want to check it out. Despite the ups and downs, it still garnered enough interest that it’s growing significantly.

Laks: This has been very interesting. Thank you for telling us about the mass adoption of the blockchain. We do like to ask all our guests – how do you envision blockchain changing the world?

Melissa: Well, in some senses I feel like it already has. I saw it on the ground in my community where more and more people started coming to the meet-ups that we have had every week since 2014. We are having these conversations on a multitude of topics, not just finance and tech but sociology, psychology, philosophy, game theory, and economics. It was so amazing because how often do you get in a room of people from all walks of life and have those kinds of really rich conversations? Part of it was just the nature of the group itself and the fantastic facilitator. But it’s also that the field of cryptocurrency calls us actually to consider all these types of things, and to really understand it you need to learn about all these different fields.

So for me, that’s a real impact. Even if it hasn’t been adopted as a general payment method for everybody, the change happens in mind and the mindset. How people view the world and how financial systems, technological systems and business models of profit sharing and media should be organized. So it calls you to question, and I think that will lend itself to birthing a new generation of people that have different types of thoughts that they’ll integrate into designing and creating new products to come.

Laks: And how do you think the market for the blockchain-based solutions will evolve?

Melissa: think that the market will evolve to adjust to what users really want, what they can actually bear themselves to participate in. Right now there are many projects at the funding stage, so it’s about what investors are willing to put capital behind and what projects actually gain traction. I think that there’s a lot of corporate and enterprise level interests that are really pushing forward. So it’s almost a little bit of a race to who is going to be the one or a conglomerate of some to push user adoption. And what I mean by that is, is it centralized or decentralized, or is it some interesting hybrid, or is it going to be the big media giants who end up eating the little guys because they already have an existing massive user base? So I think it’s like who’s going to be faster to the table, who’s going to create real tangible, practical, innovative solutions. Who has enough money to do so and the resources to do so and what’s the appetite of the users themselves.

Laks: This has been fascinating. Thank you again for coming to Blockchain Zoo and telling us about the mass adoption of blockchain. We wish you good luck with all your current and future projects.

BBH Guest: Melissa Loh, Co-Founder at 1Unit
Melissa is an entrepreneur, business and leadership coach, consultant and project manager. She believes that business can be one of the fastest vehicles for positive change in the world, hence her interest in blockchain technology projects and the active participation in cryptocurrency and blockchain communities. She bridges ideas, cultures, and resources between Asia and the US, as she operates in Singapore, lives in Bali, and regularly visits San Fransisco and Los Angeles. She leads and supports startups and established organizations that aim for triple bottom line impact – people, planet, profits.

Blockchain Beyond Hype is a series of interviews with blockchain experts and technology professionals from all across the globe about blockchain projects, challenges, innovations and the future of blockchain within the blockchain jungle!