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Where do you think we are on the journey to mass adoption? My take based on the Diffusion of Innovation theory.

By Papa Lou | Educational Papa | 20 Apr 2021


I want to take a moment to explain the way I think about where we are in the cryptocurrency space and where we can go from here. To do this, I apply Everett M. Rogers' (1962) Diffusion of Innovation theory, which is normally displayed in a normal distribution curve, shown here.

In sociology, innovation is broadly described as, "an accumulation of many individual items over a relatively long period of time" as "no innovation springs full-blown out of nothing: it must have antecedents (events that come before the innovation)" [1].

So in terms of cryptocurrency, I think we all know that the 2008 fiat US financial collapse was the antecedent to the Bitcoin whitepaper written by Satoshi Nakamoto [2]. This was the initial innovation, combining cryptography, digital signatures, and the proof-of-work mentality, ideas that were applied for other uses, into a new idea of a peer-to-peer version of electronic cash.

This initial innovation is where we begin on the diffusion of the innovation curve.

r/CryptoCurrency - Where do you think we are on the journey to mass adoption? My take based on the Diffusion of Innovation theory. Links to resources provided.

 

So Satoshi Nakamoto is BEFORE the 2.5%, the creators of any product or service development. Next is what follows based on this theory.

Innovators: These individuals are those who seek out and embrace new innovations, and are not afraid of the risks associated with the new idea [3]. Here I like to think about the "Bitcoin Pizza" guy and all those tragic stories of those who have lost hard drives containing hundreds of BTC on them. These were people who were taking on the risk of a new idea, regardless of where it could have gone. These individuals need little if any information to come on board if the idea sounds good to them [4].

Early Adopters: These are the individuals who are open to change, but respect the social system that surrounds them. This means that they are a bit more risk-averse than their innovator counterparts but adopt new innovations more willingly than the majority of their social system around them [3]. It is at this point that people like "social media influencers" begin to come on board, sparking interest and encouraging more adoption. It is also at this point, that I believe, this subreddit was created to build a community of those who are also early adopters of the new idea.

Early Majority: The early majority makes up about 1/3 of the marketplace within a specific system. These are your "average" members of society, those that come on board when it becomes the "cool thing to do." These individuals typically need to see some evidence that the innovation works, and there is some staying power to the new idea [4]. This is where your friends start to come on board, one by one. They begin to see your success or happiness using the new innovation, so they inquire about your new development.

Late Majority: While early adopters tend to be younger and more familiar with technology in general, the late majority are those of the population that is older and more reluctant to adopt the "latest trends" [5]. These individuals tend to need a lot of examples of success stories regarding innovation in order to jump on and accept the new idea in their everyday life. This is when parents and distant families begin to adopt the innovation after much nagging and conversation. Think about when parents first started to adopt social media years after their children were using it every day.

Laggards: These individuals only try new innovations when fear and pressure push them to do so [4]. We saw this in full force when COVID disrupted everything and the laggards that owned businesses and who refused to have a website, refused to have a social media presence, and refused to participate in online ordering, were forced to change based on the fear of losing their business and the pressure to "get with the times."

So, by strictly applying this theory in the cryptocurrency sphere, I think that we are between the early adopters and the early majority. Right on the line that divides them. 

  1. Many seem to agree that crypto is in the early stages. The majority of us have friends and family that are still skeptical, and most of us are investing alone as those we talk to will listen, but are not ready to jump on.

  2. Many of us seem to agree that crypto is still difficult to "get into." Difficult to transfer, buy things with, and properly store.

  3. However, we have all seen the headlines, companies like Tesla, PayPal, Visa, and Mastercard are all coming on board. CNBC now regularly talks about Bitcoin, and the concept of BTC is creeping into the news cycle every day.

  4. Yet, Bitcoin is about as far as the news goes when talking about cryptocurrency. Only Reddit, YouTube, and blogs will talk about ETH or ALTs in general.

All of this leads me to think that we are, in fact, making our way to the mainstream adoption, and can all take pride in being part of the small group that finds an innovation before the masses and reaps the benefit of shaping that innovation as it grows, and are on the forefront of a technology that will shape our financial space forever.

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