Scarcity and Authenticity Will Lead The Way for Consumer-Focused Crypto Dapps
I believe scarcity and authenticity are the two most important features for crypto dapps in the near-term. Digital scarcity never before played a big role on the internet, but it’s is a really interesting quality because it allows for the appreciation in digital asset prices. It is simple supply & demand: if the supply remains static and demand increases, the market price for the asset will increase. In addition, blockchain allows us to verify that the assets we own are real and authentic, based on decentralized ledger of information.
There will only be 21M bitcoins ever, and it’s expected that 4–6M were lost forever according to Chainanalysis. In my opinion, there won’t even be enough bitcoins for every person in the crypto community alone to own a whole bitcoin, before we even get to worldwide adoption and a globally accepted “digital gold”. There are 25M users on coinbase.com today, so technically there won’t be enough Bitcoins for every coinbase.com user.
Looking forward, it makes a lot of sense for crypto community to be so optimistic for dapp adoption focusing in these two areas:
- Trading scarce game assets that serve some utility inside of a game
- Trading digital collectibles
Both game assets and collectibles both require a need for back-end that guarantees authenticity and fixed quantity, as well as a 100% trustworthy way to trade them. Crypto game assets, that serve real utility inside of a game, are definitely one type of asset that struggles with authenticity and trading of the assets. In addition, I think on-chain collectibles that serve some type of digital value is another use-case that has a chance at going mainstream. I think the killer feature for both blockchain games and collectibles is that they will allow users to make money and track the prices of their assets, just like how crypto traders follow their crypto portfolios.
Scarcity would not be possible without the ability to guarantee authenticity of an asset on the blockchain. I remember the moment I really “got” bitcoin was when I saw public TX records of bitcoin transactions. I think it’s likely that the first major use cases we’ll see will be related to game assets and collectibles as they leverage the quality of scarcity and asset appreciation, which we’ve seen also being applied to BTC and altcoin markets.
Although I believe in porting a lot of “centralized” app use cases to decentralized web, such as censorship resistant publishing, social media, voting, document signing, video sharing, marketplaces, casinos, messaging and more, I am more optimistic in the near-term for crypto use cases that simply weren’t possible before a decentralized web. Existing network effects for centralized applications are hard to compete against; I don’t even think if there was an exact clone of Dropbox that was free would users convert to it, or if there was an ad-free decentralized clone of Facebook would users flock to it. Although these dapp “needs” may seem unpredictable and unknown, I believe with enough experimentation and creativity we’ll see some interesting use cases take off soon enough.