It is difficult to time things in the future since, by definition, it is unknown. People spend a lot of time making forecasts in an effort to predict where things are going. In a situation such as this, we are all wondering when blockchain will take off and reach the point of explosion.
Throughout this article, when I refer to growth, I am not referring to pricing action. This will focus upon the usage and development.
One of the problems with what took place the last 20 year is that we are in a digital world. This has created a situationwe never saw before. The rise of mega-technology companies that control everything is mind-boggling. These companies appear to get bigger on a weekly basis. While many are calling for action, there is really little that can be done.
It is also part of a shift that we are seeing from the Industrial Age to a digital one. This is also marking the most likely end to capitalism. This system served the world well yet it is time to move on.
The digital arena naturally creates monopolies. This is due to a very simple premise: zero marginal cost.
Let us use Amazon as an example. Being predominately an online store, this company has very little capital requirements when expanding. While there are some fulfillment costs and, perhaps, minor upfront ones, the percentage to expand into a new market is essentially zero. If Amazon wanted to enter another sector, it only needs to add another few pages to the website.
Consider if a pizza company wanted to get into the automotive business. The cost of capital would be enormous. Garages would have to be built or rented. Labor would be hired along with signage, tools, and other equipment. The cost of expansion would be great.
Facebook is in a similar situation. When it wants to enter an additional market, it simply adds to the existing platform. After the upfront programming costs, the plug in is there forever. For a Facebook, it costs no more to have 1.1B users as it does 1B.
The blockchain/cryptocurrency world will be similar to the Internet. These are different networks that, at some point, will all be interconnected. Once that happens, along with open source architecture, we will see a gravitation towards "monopolistic" entities. Again, with zero marginal costs, the expansion will come naturally in a way that cannot be stopped.
That does not mean to say there will be one of everything. Just like there are thousands of different versions of Linux, we will have any the same on blockchain. Developers will take what is out there and build upon it. Nevertheless, we will most likely see some dominant applications.
While this might appear to be a problem on the surface, it is not. We are entering a tokenized world. This means what is developed will be owned by none (or by all depending upon how you look at it). The biggest benefit to blockchain is trust. By having these technologies owned by nobody, trust is established. Anyone can opt to participate to whatever degree he or she desires. If something is not to the liking of a certain group, a fork is always possible.
At present, there is an enormous cost to blockchain. The reason for this is the development of most everything is being done now. There is very little open source code out there for newer developers to utilize. This extends the time element. One of the advantages to open source is it provides a short-cut. Developers can take code and tweak it as opposed to writing it all from scratch.
We are also seeing the drive to upgrade systems to handle larger volumes of transactions. This is incurring significant cost. The same is true for a lot of the applications. There are a few open source interfaces but that is it. Over time, we will see this expand so that developers can have MVP within a couple days of starting.
Digital economics is something that we are not really accustomed to. Some industries have lived it for a couple decades. The world of music is different today than it was in the 1990s. At that time, there were still "record stores" that sold CDs and DVDs. Today, it is all streaming. The cost of adding another artist costs next to nothing. Also, selling one more "record" is pure profit since there is zero additional cost.
We are in the development stage of things. We see many on here creating projects that will add value to the ecosystem. Unfortunately, at the moment, it is a timely process. We are also looking at a world where the foundation is just being laid. This is why it will be a 3-5 year process before we see mainstream adoption. The basics are not in place yet.
Steem has an advantage over some of the newer systems that are being created today. There is three years worth of development behind it. This means that we have a lot of code in comparison to some other projects that are just being unveiled. This is why we are going to see some of them tie into Steem. They will want to leverage what is already available.
Looking at this exponential growth chart, it is hard to pinpoint where we are. That said, we can presume that we are somewhere along the flat part in the beginning third of the chart. We are plugging along without much visible difference on a weekly basis. Changes are taking place hidden from the view of most.
This is how exponential situations work. Most did not see Amazon obliterating the retail sector until it was well along the exponential growth curve. The same will happen here. If we look back over the Internet, newspapers, magazines, and video rental outlets did not see the major threat until it was too late. Once the exponential growth took place, there was no stopping it.
The key is just getting enough stuff developed to get to the elbow of the growth chart. Once that happens, society rapidly changes.
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