The Mystery of the S Curve: Why Bitcoin Adoption Is Taking Longer Than You Think

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This is an opinion editorial by Bitcoin Graffiti, a software developer and graffiti artist.

In 1714, the British Parliament introduced longitude actlegislation offering a £20,000 reward (over $1 million in today’s money) to anyone who can accurately determine longitude In the ocean. Captains had struggled with poor navigation since the start of global trade. Although sailors could easily measure latitude by measuring the altitude of the sun, determining longitude was very difficult and inept technology caused ships to turn. Without visibility, the men were sailing blindly on the high seas. The increase in travel time led to scurvy, delays and ships breaking on rocks – losing crew and cargo forever in the deep.

Luckily, a genius Brit came up with a solution – the fine watchA watch that can keep its beat on choppy seas. john harrison Was it genius and his invention outperformed crude astronomical techniques that relied on clear skies, number tables and hours of calculation. No one was second best.

But his innovation was not adopted!

According to “longitudeAs claimed by Sobel, it took until 1828 for the Board of Longitude to be disbanded and the chronometer to be adopted on a large scale.

Why on earth did it take so long?

going beyond the s curve

“…the diffusion of innovations is a social process, even more so than a technical one.”

-Everett M. Rogers, “diffusion of innovations,

Another timekeeping device was invented by Satoshi Nakamoto in 2008. Bitcoin is a decentralized clock in cyberspace that enables precise economic calculations and financial navigation in life’s uncertain waters. Although its features are better in the eyes of its users, the adoption rate is not that great.

Many claim it is on the verge of crossing the gap: “It’s the Internet of 1995!” But in our rush, we expected iphone adoption, Sure, ideas spread faster than ever, but the only variable controlling the rate of adoption is making it more simplistic to consider this trend. Longitude’s story shows us that, even when an innovation is a complete no-brainer, it can take longer than you think to catch on.

Everett Rogers was the social scientist who popularized An overview of how innovations spread in social media through normal distribution, By aggregating adopters over time, the uptake looks like an S curve leading to a hockey-stick upward. critical mass Number of users has been reached. This model gained popularity at the beginning of this century because it explained the exponential growth of mobile phones and the Internet.

But Rogers’ research involved much more than this memorable model. In his book, “diffusion of innovations,” he considered five parameters that govern the rate of adoption of a technology.

Five purported properties of bitcoin

A: relative advantage

“Diffusion is a special type of communication in which the message content exchanged is related to a new idea.”

-Rogers,diffusion of innovations,

The perceived value of bitcoin is determined by two things: need and price.

For a need to exist, one has to experience a problem. The issues of fiat money have long been recognized within the cyberpunk and sound money communities, and they were among the first to adopt it. But outside of these social circles, awareness of the devaluation of the dollar is low. Lack of financial education and legal preoccupation lead people not to seek solutions. without one proper diagnosisNo one needs treatment.

The bitcoin price is slowing adoption and the unit bias makes the coin look expensive. People don’t know that it is subdivided. The value is also volatile, obscuring its store-of-value function. You can compare it with other adoption cases. For example, mobile phone users immediately understand the value – calling anyone, anytime, anywhere. But with bitcoin, 80% drawdowns and “numbers going down” for years are not uncommon. A high level of abstraction is required for the value and high conviction of bitcoin to be shaken by the market.

Two: Compatibility

“Potential adopters may not recognize that they need an innovation until they are exposed to the new idea or its consequences.”

-Rogers,diffusion of innovations,

The first version of a new technology is rarely a perfect match for the entire market, catering only to a niche group of innovators. According to Rogers, an innovation is needed innovated To find product-market fit.

Bitcoin is currently compatible with financially educated people. But beyond this group, bitcoin is not perceived to be in line with people’s values ​​and belief systems. It is still a niche product in the innovator stage.

For bitcoin to reach more early adopters, it needs to be reoriented to different global markets. Currently, two different avenues are emerging: its narrative and medium-of-exchange (MOE) use. Here are three examples:

1. “Banking the Unbanked”: Bitcoin Could Help People in Developing Countries Leapfrog the Legacy Banking System. starlink And enables smartphone adoption where a MoE, system for remittances and a bank account in your pocket are of high value. leaders in countries like El Salvador, Mexico And Indonesia Use such narratives to explain Nakamoto’s invention.
2. “Cyber ​​warfare”: in his book, “Software, jason lowry Uses military language to re-establish bitcoin as a geopolitical asset to be fought over by states in cyberspace, creating a new domain of warfare. Through a military lens, he rebrands bitcoin as “bitpower”, creating a vision in which ASICs convert energy to raise a cryptographic wall, increasing the cost of an attack on financial data. Lori is a change agent, translating bitcoin to make it compatible with the US military.
3. “Grid Balancing”: This is lingo for the Energy Sector faction. Proof-of-work mining can be used to make energy grids more resilient, balance supply and demand, and profit from trapped energy sources.

These narratives are designed to make bitcoin more compatible with specific social groups that speak different languages. With increased understanding, these groups will drive the creation of new uses and applications.

Three: Complexity

The chronometer was far ahead of its time and it took years for clever entrepreneurs to copy and manufacture the device. Similarly, Nakamoto had to present his invention to its early adopters. bitcoin talk forum, Since then, entrepreneurs have gotten involved and built services on top of the protocol, including cold storage solutions, mnemonic seed phrases, and exchanges. These upgrades improved the user experience, but compared to mobile phones, bitcoin is still relatively complex.

This is true even at the stage of development of bitcoin. New software developers experience a huge barrier to entry in implementing bitcoin in applications – the ecosystem is not as developed as regular web development. And while it’s true that bitcoin is not what it was in 2008, and upgrades continue to make it more accessible – with groups like Horoscope And Sameer For example, the recently launched software development kit to ease integration – Where’s the Steve Jobs “boom” moment?

We are still waiting for the offbeat killer app.

Four: testability

“Things must be learned by doing, however much you think you know it, you are never sure until you try.

-Sophocles,”trachynia,

The chronometer had a long trial period. Months of testing and traveling had passed before the captains could update their comrades on the improved navigation. The device was considered good only if it was accurate throughout the sailing voyage. On top of that, a ship had been operating for months, retarding word of mouth.

The journey of bitcoin also takes time. Since the price is volatile, it is not unusual to be “underwater” for some time. This can impact on the benefits users experience, but can also prevent peer adoption. Trial period can be as long as halve the prizeAnd true advocates are only molded after enough time in the market.

While bitcoin’s testability is easy – one can simply buy a little bit – the overall net gain is great with only one large purchase, proving that the full test period can be long until a halving.

Five: Observability

Bitcoin is digital and thus poorly visible. it’s not like a Ford Model T Racing on the streets with your advantages on display. Most people only learn about bitcoin in news reports when it breaks through its all-time high, which may only last for a relatively short period of time.

Acceleration speeds up with more visible applications. Perhaps in the near future, bitcoin miners could be an integral part of power plants and homes. People can send bitcoin to friends on the street with their phones. or they see the lightning button on a nostra client And find out where it’s possible to connect Satoshis with their favorite influencers.

Furthermore, it is hard to trace the wealth raised through bitcoin. It’s hard to see rich HODLers until bitcoiners start wearing Guccis and driving orange Lambos. But wearing giga-chad t-shirts may not be in vain and could potentially speed up the spread.

reward

Harrison enslaved his timekeeper alone for 20 years. His invention was blocked and retarded by bureaucracy, but eventually earned him a £20,000 reward. Smart entrepreneurs were able to scale up their simple design to mass production, bringing chronometers onto ships where they saved time, freight and lives. It took a long time, but the chronology eventually floated to the top.

Today, the people of the earth are economically weak. Like ships ignorant of longitude, they sail blindly through life’s treacherous waters, unable to calculate economically. We are barbarians living in the pre-science stone age of money. Future generations will look upon us with dismay.

But it’s about human psychology and how people adopt new ideas. The technologies that are going to change the world seem self-evident in hindsight. You’re right in the midst of a paradigm shift, the blaze of a scientific revolution, and it’s hard to see where things are going.

Bitcoin will not spread as fast as Facebook, the Internet or the iPhone. A lot needs to be created, reimagined, and translated before the masses can get onboard. Like electricity, it’s hard to grok the base layers without actual equipment.

we will get there.

But it will take longer than you think.

This is a guest post by Bitcoin Graffiti. The opinions expressed are solely his own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.