Consider the world before the iPhone. Mobile phones, as they were still called back then, were used for calling and texting. Useful devices, to be sure, but limited in what they could do. Early attempts to introduce internet browsing into mobile phones were clumsy at best and not eagerly adopted. Browsing the Internet on your desktop PC or laptop remained easier, faster, and more intuitive.
Of course, we know how the story has gone since then. A smartphone has become perhaps the defining piece of hardware of the early 21st century; a device now arguably more important than the PC or the laptop; a productivity machine that you can use to pay for your shopping, to order cabs, send emails, post selfies to the world (for better or for worse), and connect with people you’d otherwise never have a chance to connect with.
The Appearance of Super Apps
Smartphones are omnipresent and increasingly all-capable, and this is particularly true in Asia. Whereas the West saw the desktop PC introduced in many households in the late eighties and early nineties, Asian countries, most of which were still developing countries at that time, skipped the desktop PC revolution and adopted smartphones as their primary hardware device in the late 2000s.
This has led to what are now called “super apps”, or multifunctional smartphone apps that allow you to do in a single app what would require multiple apps in Western countries. Let’s take the biggest mobile messaging platform in China, WeChat, and compare it with its rival from the West, Whatsapp. Both apps have messaging as their core functionality. But where people don’t use Whatsapp for much else than messaging, people use WeChat to order food, hail cabs, pay their utility bills, and even to store a digital version of their government ID cards.
And that’s only one example. Grab and Go-Jek are two other examples of super apps with tens of millions of users, respectively from Singapore and Indonesia. In 2016, I spoke to an executive from Alipay, the largest mobile payment platform in the world, who told me how retailers could now project QR codes on the outside walls of their stores, for consumers to scan the codes with Alipay and buy it without ever entering the store. Their order would be processed online and delivered to their home address a day later. It’s innovations like these that are rapidly changing the face of society as we know it.
Blockchain for Mobile
The market penetration of smartphones around the world, the increased power of super apps in Asia, and the innovative use of a device that used to be only for calling and texting, make the smartphone a prime candidate for introducing blockchain technology to the world.
Ever since the introduction of blockchain technology in 2008, people have realized its potential to greatly shake the foundations of important industries. So far, there’s been plenty of noise and certainly plenty of hype, but no blockchain project has been able to excite millions of people so far. The so-called “killer app” hasn’t been released yet.
I believe this is mainly for two reasons. First of all, current blockchain projects don’t solve a painful enough problem. Mind you that a painful problem isn’t necessarily the same as a big problem. Currently, many blockchain projects are ambitious and want to tackle big problems: how we vote, how we transfer money, how our data is being used, and so on…
While these are noble pursuits, consumers don’t care enough for data privacy, online anonymity, digital ownership, or any of the other benefits that blockchain brings, for such blockchain projects to gather the necessary momentum. People are at best ideologically interested, but that’s not enough for mass adoption. It is the main reason why many blockchain projects struggle to gather momentum in the West, because things work relatively okay.
Compare this with the success of certain blockchain projects in developing countries. Dash has enormous success in Venezuela because it gives Venezuelans an easy way to transfer and receive money to and from abroad without paying exorbitant fees. Binance Uganda signed up 40,000 users in its first week, because it gives Ugandans access to financial instruments they otherwise don’t have access to. These projects are successful because they solve painful problems in the context of those countries.
Which leads me to my second point: the killer app hasn’t been released yet because blockchain projects forget about the context that they live in. Dash in Venezuela and Binance Uganda are primarily mobile projects, because people in those countries don’t have easy access to desktop PCs or laptops. In fact, 74% of Ugandans go unbanked, but they don’t need a bank account for Binance Uganda. All they need is money in the mobile payment system.
As such, budding blockchain developers searching for the next big idea should look at how people use smartphones around the world. For example, did you know that billions of dollars of mobile revenue still come from SMS? And that it can take months before app developers receive that revenue from SMS providers, who also take a huge chunk of that payment? That’s a painful problem. But a blockchain project that cuts out the SMS provider and sends revenue directly to the app developer for a much smaller fee would solve that problem.
Context is also the reason why the blockchain killer app is most likely to emerge in Asia. After all, the majority of the world’s population lives there, smartphones are omnipresent, and the companies behind super apps have shown their willingness to innovate. Additionally, countries like South Korea, Japan, and Singapore are some of the friendliest countries for blockchain technology and cryptocurrencies. That’s fertile ground for a killer app, if you ask me.
As a blockchain developer, this gives you a structure to develop your idea from. Let’s consider the medium first: if you’re looking for mass adoption, as explained above, there’s little reason why a blockchain project should not have mobile as its primary focus. Secondly, you should look to solve a painful problem. If it’s big, that helps too, but it has to be painful especially. Thirdly, consider the context. How do people currently solve this problem today? What does it mean for companies if you solve this problem?
Thinking about the above might lead you to ideas that aren’t too far out of reach; that don’t require too much innovation. For example, Alipay processes 175 million transactions a day. Currently, this is done with regular financial infrastructure. Imagine you can make that process 2% cheaper or a little bit faster with scalable blockchain technology. It might not be a painful problem for the end consumer, but for Alipay it’s this kind of incremental innovation that keeps them as the number one mobile payment platform in the world.
What About Gaming?
Gaming is turning mobile too. Even big players such as Nintendo and Blizzard are going mobile (whether you like it or not). According to marketing intelligence firm Newzoo, gaming will account for 76% of the $92.1 billion of mobile app revenue in 2018. Much of that 76% comes from in-app purchases.
For mobile gamers, it’s simple: they want a great game to play. For mobile developers, things are more complex. Once again, receiving the money that their app generates is a laborious, slow, and costly process, with Google and Apple charging a 30% on all in-app purchases from apps in their respective stores. It’s also difficult for developers to gather consumer insights that they could use to improve their games.
These are painful problems that blockchain technology can solve, either by developing a game and a payment solution or, more realistically, by offering a better payment solution. In the West, this might be hard, because it would require circumventing the popular Android and iOS stores, but the market is much more fragmented in Asia. The Google Play Store is blocked in China, and there are many app stores that might be much more amenable to a blockchain payment platform that sets them apart from their competitors. Again, it’s about context.
Blockchain technology has plenty of potential, but it needs to be embraced by millions of people. Currently, that’s not the case, and that’s mainly because blockchain projects try to go for big problems instead of painful problems, and because they don’t enough consider the context of the problem and the medium through which they want to solve it.
As it stands today, the smartphone market in Asia has billions of users and huge volumes, a fragmented market, companies willing to innovate, and governments friendly towards blockchain technology. Whether in the form of an excellent game, a more efficient payment system or something else, that’s fertile breeding ground for the blockchain killer app we’ve all been waiting for.