Over the past few centuries, the pace of global adoption of new technologies has accelerated at a massive rate. Whereas it took 75 years for the telephone to reach 50 million users, it only took 35 days for the video game Angry Birds to reach the same number of people. Of course, as a video game, Angry Birds faced an extremely low barrier to entry. For truly disruptive innovations such as cryptocurrency, they still can face significant hurdles before achieving a high level of adoption.
In order to get a sense of the obstacles that cryptocurrency faces before it gains wide acceptance, this article will break down some transformational technologies that have come before it, what slowed down their progress, how long it took them to reach mass adoption, and what their impact on the world has ultimately been. We’ll then break down the lessons that cryptocurrency investors can learn from what happened to those previous technologies.
Inception: In 1876, Alexander Graham Bell patented a device that could replicate the human voice and sent that signal to another device.
Barriers to Adoption: The technology was brand new, there was no infrastructure in place, and even rapidly informing people on what the new technology was proved difficult because you couldn’t simply call them on the telephone!
Time to Mass Adoption: By 1905, some 29 years after Bell’s device was patented, there were 2.2 million phones in use in the US, with that number more than doubling to 5.8 million just five years later.
Impact on the World: Who doesn’t own at least one telephone? They became the staple of communication for literally every possible purpose — personal, business, government — and connected people like no other device previously in history.
Lesson for Cryptocurrency: From the telephone, the lesson is patience. Nearly three decades passed from Bell’s invention to legitimate use. While adoption of new technology in the 21st Century occurs much more rapidly, cryptocurrency and blockchain are uprooting an entrenched financial system. We’re witnessing transformational change, but in bold spurts.
Inception: The Diners Club was the first card that could be used to pay multiple merchants, and it launched in 1950.
Barriers to Adoption: Complexity was a huge barrier, as credit cards required merchants to call the bank, which in turned called the credit card company to make sure the transaction could progress. Many consumers shunned credit cards because they feared spending money they did not possess and the possibility of going into debt.
Time to Mass Adoption: Credit cards really started booming in the 1970s.
Impact on the World: Used correctly, they allow consumers to make purchases quickly and conveniently, both in stores and online. On the negative side, they give people who haven’t properly planned their finances a huge avenue to spend unwisely and incur massive amounts of debt that can take a lifetime to pay off.
Lesson for Cryptocurrency: From credit cards, the lesson is weathering the early storm. Credit cards were viewed as too complex to be worth the hassle of using one. Cryptocurrency faces that same uphill struggle. Explaining to the average consumer about a form of finance they cannot see, touch, or find in a government mint can take patience.
Inception: In 1916, George Holt Thomas founded the company that would become British Airways and three years later began flying across the English Channel.
Barriers to Adoption: It was hard enough to build a functioning airplane in the early 20th Century, much less to put in place an infrastructure of airports, maintenance facilities, communications towers, and regulatory standards.
Time to Mass Adoption: The biggest catalyst to air travel becoming widely accepted was World War II (1939-1945). When the war ended, most Western nations were suddenly flush with airplanes and pilots to fly them.
Impact on the World: No invention has ever made the physical world smaller than the airplane, which turned journeys that took months or even weeks into trips that spanned just a few hours. It has sped up the rate at which business, government work, travel, and everything in between is done.
Lesson for Cryptocurrency: From airlines, the lesson is infrastructure. The country wasn’t ready for scaling this landmarks achievement, and some progress was put on hold while airstrips and other structures were built.
Inception: Research on internet technology accelerated in the 1980s as a way to connect academic and military networks. Public commercial use began in 1989.
Barriers to Adoption: Dependence on older technology was the biggest barrier. An overall lack of knowledge also slowed public acceptance. Additionally, computer manufacturers had to adapt by putting modems inside of their machines.
Time to Mass Adoption: By the end of 1995, there were 16 million users worldwide, about 0.4% of the world’s population at that time. Within three years, the number of users reached 147 million, and by September 2003, 10% of the world’s population (677 million people) were online.
Impact on the World: Our path to accessing information has gone from making a library trip to just typing a couple of words into Google. Email has eclipsed the postal service as our main form of written communication, and we can shop, order food, communicate, conduct business, and a million other things in “real time”.
Lesson for Cryptocurrency: From the internet, the lesson is staying the course with sound technology. You’ve got it, they want it (even if they may not know it yet), so help them along the way. Don’t expect everyone to bend over backwards to meet your needs. Meet theirs instead to get them on board.
Inception: The first phone with internet capabilities came from Japan in 1999, but US consumers didn’t see anything similar until T-Mobile’s Sidekick arrived in 2002, followed by the BlackBerry in the middle 2000s.
Barriers to Adoption: Building a network that could handle all of that data took time. Competition led to a lot of lousy models, which hurt the whole market with their shoddy tech and lack of support.
Time to Mass Adoption: The first iPhone entered the US market in 2007, retailing at $499 for the 4GB model and sold 1.4 million units. The next year, that number jumped 729% to 11.6 million units sold. The rest is history.
Impact on the World: Suddenly, we were all Mr. Spock and Captain Kirk using our handheld tricorders to communicate with others, look up information on literally anything, record videos and voices and notes, watch TV or movies, and oh, it was also a phone.
Lesson for Cryptocurrency: From smartphones, the lesson is anticipating the product that catalyzes mass adoption. Smartphones existed before Apple’s version came along, but it was only once the iPhone entered the market that the device took off in terms of mass popularity.
A long-term approach is the best idea for any investor, and for those looking into cryptocurrency, even more so. Technology evolves at an ever-accelerated pace, but it will still take time to change how the world thinks and reacts to certain ideas. As more and more industries and companies get comfortable with cryptocurrency and blockchain, investors will see more utility, value, and profit potential.