Why it will take another decade for blockchain to go mainstream

Editor's note: Chris Skinner is a banking and technology veteran who serves as president of the Financial Services Club, an organization he founded in 2004.

I am often asked how long it will take for the changes I have outlined to take effect, and my answer is between 10 and 20 years.

Building a real-time, nearly free financial network on the Internet using blockchain and mobile phones is going to take at least 10 years before it becomes mainstream. "Oh," some people will say, "that's a ways off, can we talk about something that's going to happen soon?"

That's an interesting reaction, and sure, we can talk about how the Apple Watch payment app doesn't work, or Chase Pay, but come on, I'm not talking about incremental innovation, we're talking about radical innovation.

Using a shared ledger to rebuild the entire financial market, 7 billion people will join this financial network through their mobile phones, which is a big project. Stripe's other application is interesting, but it does not bring huge changes. We will see it go downstream next.

So why did this fundamental change take 10 years, at least? This is because how long it takes for any major change to become mainstream has to do with the "cascade effect."

The waterfall effect is this: from idea to implementation, to acceptance, and finally to mainstream, this is a cascading process. And you have to understand that there are many participating roles in this.

Initial point

It starts with a new technology, such as the blockchain shared ledger protocol.

This technology is already built into some of the most powerful providers out there, including Blockapps, Chain, Chainalysis, Case, Circle, Coinbase, ConsenSys, Epiphyte, Ethereum, Eris, LedgerX, R3CEV, Ripple, Symbiont, TradeBlock, and many more, who are innovating to allow for this technology to be adopted.

Then, the large technology providers also started their plans to join these innovators and provide the right architecture for their banking customers.

Some people say that existing technology companies are changing too slowly.

In fact, some argue that the real problem is not the bank's legacy systems but its legacy vendors, but hey, that's not what we're talking about. Ultimately, vendors will adopt this technology and integrate it into their own frameworks and architectures.

Golden Time

Next is the golden period for banks.

This will be another journey as banks must adapt to the frameworks and architectures provided by their incumbent suppliers and innovative startup partners.

This takes time, and different banks may have different processing speeds.

For example, it will take about six years for the shared ledger concept in Satoshi’s white paper to be truly accepted and used by banks’ proofs of concept (PoCs).

In many cases, it still takes 3-5 years from POC to implementation and then to mainstream application.

For the sake of discussion, we believe that it will take 10 years from Satoshi’s white paper to mainstream financial institutions’ absorption.

Consumer changes

OK, let’s say mainstream financial institutions are ready, but businesses and consumers haven’t bought into it yet. Often, banks can innovate, sometimes quickly, but their consumers take time to change.

Companies will adopt a technology because of the reduced costs and improved processing speeds, such as banks and their existing technology providers, but these companies' existing systems and legacy suppliers will also need to adapt and accept the change.

It will take another five years, but finally, consumers will be able to enjoy this service. But the question is, will they want it?

Many friends in banks told me that every time they updated their banking apps, added new features and changed the interfaces, the Net Promoter Score (NPS) of these apps would drop.

That’s because 80% of customers don’t like change . Strike!

So it will probably take a few years for customers to accept a new, cheaper and faster service. Finally, we have arrived at our destination.

Acceleration after arrival

However, this waterfall effect: new technology -> startup developers -> incumbent suppliers -> mainstream market applications -> mainstream market customers -> ultimately, customers' users. This means that any major technological reform will take at least 10 years, perhaps 30 years.

After all, the mobile phone was invented in 1973, but it took nearly 30 years for it to become mainstream.

You might say that apps can go viral in seconds! But these things are only possible after you have made changes to the underlying architecture, which is why breakthrough changes take decades.

Once you make that change, then any innovation that builds on that underlying architecture can move at the speed of light.

That’s why I say that blockchain still needs another decade to become mainstream because it is changing the foundations, tracks, and paths of finance.

Original text: http://www.coindesk.com/blockchain-decade-away-mainstream/
By Chris Skinner
Translation: Overnight porridge
Source (translation): Babbitt Information (http://www.8btc.com/blockchain-dec…way-mainstream)