How Friction Slows Blockchain Adoption

Blockchain services like Sia or Golem should achieve mainstream adoption before Bitcoin, Litecoin, or any other blockchain currency. Cryptocurrencies are attempting to give legal standing to digital money, while blockchain-based services use the technology to provide innovative market solutions. A big factor restricting mainstream adoption of these blockchain-based services is the friction a new consumer experiences in using the product. Friction is defined as a mental resistance to completing the sales cycle, which in this case refers to the process of converting fiat currency (USD, EUR, JPY, etc.) into the platform’s native token. For those unfamiliar, a modern example of reducing customer friction can be found in ecommerce with the offering of one click checkout instead of the traditional multiscreen checkout.

Purchasing Siacoin to use Sia’s distributed cloud storage solution is a great example of the need to reduce friction. Although Sia is being used, this example applies to all service-based blockchain projects. Currently if a new consumer wants to use Sia he or she must complete the following steps:

1. Purchase Bitcoin with fiat via an exchange like Gemini or Coinbase
2. Transfer the Bitcoin to an exchange such as Bittrex
3. Purchase Siacoin with the Bitcoin
4. Transfer the Siacoin to a Sia wallet
5. Select a hosting contract and begin uploading your files

While only five steps, this process can feel overwhelming for someone new to the space, and can be an extreme deterrent for using the product. Given cryptocurrency will almost certainly not be replacing fiat-driven economies, developers need to be aware that people interested in using their product may not be familiar with the cryptocurrency ecosystem. While an integrated fiat to Siacoin exchange API might be a solution, there are likely technical and security related challenges that make another option better. In either case, while software development should probably remain the top priority, solutioning a friction-lite bridge for the fiat-based consumer is an absolute necessity if these projects want mainstream adoption.