Cryptocurrency Adoption — Drawing Parallels From Email
Many significant innovations, evolved over time — today we compare
It’s easy to imagine that when the world changes, it happens in a single flash. One moment things seem one way, and the next they’re different. But in reality, that’s rarely the case. Change is a slow process. That’s especially true for the adoption of innovative new technologies.
We can learn a lot about technology adoption by looking at one of the most important developments of the last century: email.
At Luno, we’re constantly looking at what it might take to achieve the mass adoption of cryptocurrencies (specifically, Bitcoin) and we think that the history of email may offer us some clues.
The history of email
Email technology, like many significant innovations, evolved over time.
There is no precise date of its creation or its adoption. It incrementally evolved and took shape over decades. The first technology similar to email, MAILBOX, was used in the 1960s, before the internet was even around. As computers weren’t connected to each other, you couldn’t send messages to other users.
After MAILBOX came ARPNET, used by the US Department of Defense so everyone in the department could communicate. In 1971, the ‘@’ symbol was invented to address messages. ARPNET was successful enough to inspire the invention of internet networks in the 1980s. Within a decade, email began to edge towards mass adoption through free, user-friendly services like Hotmail and Yahoo.
Email started off among academics and the military, becoming something everyone could (and wanted to) use. Today, it’s expected that anyone with internet access will have an account, and email is the centre of our online lives. For the most part, it’s replaced many common uses of older communication methods, like sending letters or making phone calls. But that took decades and we still use mail, phone calls and even fax when it’s appropriate.
Mass adoption is a slow, ever-unfolding process
Support for technology and systems takes time to develop.
For email to become accessible, we needed the internet, widespread access to it, home computers, organising technologies, simple platforms like Hotmail and so on. It’s a common misconception that, just because a technology is hard to use initially, it will never be suitable for mass adoption. But, as email shows us, that process just takes time — perhaps not even years, but decades.
It also takes time for people to change their habits and get used to doing things in a new way. You probably check your email first thing in the morning (maybe even before getting out of bed) without really noticing it. It’s a habitual part of your life that feels natural. However, you’d probably be reluctant to change your habits around communication, in the same way changing your habits around money is difficult. Inertia is a powerful force. Persuading people to use a new technology can be one of the hardest steps.
What can the mass adoption of email teach us about cryptocurrency?
Email shows that important new systems take time to develop and scale.
However, if the benefits are compelling enough people are adept at finding solutions. Upgrading the world to a better financial system is a big task and it won’t happen overnight. But it’s worth the long process of trial and error, and experimentation to find solutions. These are still early days and the future looks promising.
In the case of cryptocurrencies, there are a lot of changes that need to happen first in addition to the need to change habits. We need to get the infrastructure in place to make it simple and safe to access cryptocurrencies. Governments and regulators need to develop robust regulatory frameworks that protect users without stifling innovation. The technology itself still has a way to go before it’s stable and scalable enough to survive mass adoption.
Email technology isn’t all that different to cryptocurrencies
At its core, money is just a means of passing information between people. We can draw many parallels between the two to better understand a little more about technology adoption.
Both technologies are decentralised.
No one ‘owns’ the concept of email and anyone can innovate based on the concept, for example, by creating a new email program. Likewise, no one owns cryptocurrencies and anyone can make their own (whether that’s a good idea or not is another matter) or suggest improvements.
A key detail that made email so ubiquitous is its interoperability, meaning all parts of the system work with other parts and are interchangeable. You can send an email from any provider to a recipient using any other provider, anywhere in the world. There are no barriers. Cryptocurrencies are also interoperable, offering seamless usage for everyone.
Both being global systems, both can be adopted by huge numbers of people, as long as they have internet access.
The barriers to entry are incredibly low. Providers have worked hard to make simple, intuitive interfaces cutting out any complexity in using the technology.
The terminology and feel of email took cues from something people were already familiar with, even if the principle was different — sending physical mail. Hence we talk about ‘inboxes’ and ‘addresses’. The vernacular borrowed from an already established system. That made it easier to see it as an improvement on the old way, better suited to the modern age, rather than being completely new. Think of this ‘borrowing’ as the spoonful of sugar after the medicine.
This continuity serves to highlight the benefits, most obviously speed and cost. Email is essentially free and messages arrive almost instantly.
Cryptocurrencies don’t carry many of the costs of local currencies (such as exchange fees and international transfer fees) and can be transmitted faster across borders. Combining easy access with obvious benefits is what enabled email to take over.
However, email didn’t entirely oust its precursors. We still send letters and make phone calls because they’re better suited for some circumstances. It certainly seems unlikely we’ll ever stop using local currencies or physical cash because there are plenty of times they’re the right option.
Yet, despite email having all the hallmarks of mass adoption, it took decades to become mainstream because it faced some of the same challenges that cryptocurrencies currently face.
For example, crime. It didn’t take long for criminals to start using emails for nefarious purposes, such as spam, phishing scams, and financial scams. Many people lost a lot of money in the process and some unfortunately still do because new, more sophisticated scams are always appearing. But on the whole, that didn’t stop us from using email because the benefits outweigh the costs. Email providers have also developed systems to keep dodgy emails out of your inbox.
Cryptocurrencies have faced similar issues. Their perceived anonymity and lack of regulation attract criminals, who use them for purposes like phishing advert scams or spending on darknet markets. But, like email, that doesn’t mean the technology itself is bad. It just means there’s a need to develop ways of preventing their use in crime.
Today, we barely notice the presence of spam emails, thanks to sophisticated filters used by providers. The same is happening with cryptocurrencies, through tools like Chainalysis, and better regulation with institutions and governmental cooperation.
Do you think cryptocurrencies will achieve mass adoption? If so, how long do you think it will take?
This content is sponsored, written and provided by Luno.
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