The blockchain space, when seen as a monolith, is very confusing. It has parts whose priorities are opposite other parts. Each niche while lightly conforming to the ideals of a superset have wildly different views on what decentralization means, which compromises are ok and sometimes if there are even compromises at all.
To make sense of this, it is better to break apart these sub-niches, understand what they value, what they are trying to build towards, and how to judge what each of them is selling.
Let’s dig in
- the focus here is on users verifying every bit of the stack, push towards more edge computing, protocols and applications not having an admin key, tech-heavy,
- Things like running your own node, Public key infrastructure based ID, and open source are the defining norms
- Currently, the smallest target market requires hard tech improvements.
- The focus here is on building blockchain-based versions of current financial products and services. Defi is a perfect example
- There is an effort towards compliance and interacting with current regulators.
- The value proposition is reduced compliance costs and ease of transacting, easy creation of new financial products because of new finance rails,
- Currently the largest target market.
- Productizing new economic devices like Token Curated Registries, Autonomous Organizations.
- These experiments can only work on blockchain networks
- It can lead to better fintech 2.0 products
- offers economists and researchers the ability to test theories practically.
- Focuses on using tech that makes blockchains work to better service a business use-case.
- For example blockchain data-structures used for entity tracking.
- Identity solutions based on public key infrastructure.
- Enterprise software vendors are the major players here.
People can build for more than one niche, but that confuses both the product and marketing message.
- Currently the largest subset of users.
- Care very much about price movements and will eventually exit to non-blockchain things.
- Consisting of developers who build applications, hardware, and services
- Care about tooling, documentation, community, and ease of application development
- May want to get paid in crypto and can benefit from experimental economic devices.
- Liability, Incentives are under-discussed here.
- Products in any niche product tons of metadata.
- Understanding patterns and delivering insights to people who pay for them is the main goal here.
- Works very well with all three product niches with academics focusing on experimental economics, data providers focusing on fintech 2.0, and protocol researchers focusing on decentralized everything.
- Currently the smallest group.
- When most people talk about adoption they mean adoption by this user group.
- Care about stable prices, known costs, and most importantly ease of use.
None of the above categorizations have hard boundaries, and people move from one niche to another quite easily. There are of course scams/scammers, whose pitch does not hold up once you ask the right questions, based on which niche they are impersonating