More than a decade ago, Apple had to deal with that perennial chicken-and-egg problem: finding killer apps that made people to want to buy an iPhone.
Developers building apps on blockchain technology face the same dilemma.
Not enough people are using browsers and tokens that run on a blockchain network, so it’s hard to amass the number of users needed to propel a new app to success.
But that hasn’t stopped people from trying or researchers from divining that decentralized apps, or “dapps,” really are just around the corner.
One recent report from Juniper Research, a market intelligence firm in the U.K., states that in the coming year we’ll see a “significant expansion” in the deployment of dapps built on blockchain technology.
Regular iPhone and Android users should be able to download a dapp on their smartphone “by the end of the year,” Juniper’s head of forecasting, Windsor Holden told Forbes, adding that the dapps most likely to first gain mass adoption would deal with verifying identity or tracking the provenance of products or food in the supply chain.
“It will occur in much the same way as the existing app ecosystem. The consumer would see nothing of the blockchain,” he said. “As far as they’re concerned, it’s just another app.” (Note that the world of blockchain is rife with predictions, despite the debates on Reddit and Telegram about where the technology is truly headed.)
More than 1,500 dapps have been built on the Ethereum network, but the use case for most is pretty insular. The five most popular dapps, including Idex, ForkDelta and CryptoKitties, are focused on crypto-asset trading of some kind.
CryptoKitties allows you to collect and breed digital cats, and some have gone for as much as $100,000, says Holden. Outside of the asset-trading theme there are a few other games and a blockchain-based Twitter clone called Peepeth.
Dapps wouldn’t exist without Ethereum, the open software platform on which developers build dapps. If bitcoin represented a decentralized bank, Ethereum is like a decentralized computer, essentially a network of agents that does more than move money around but can carry out automated “smart contracts.”
Actual dapp users are few and far between.
“Look at any site that measures traffic of decentralized apps and in almost all cases it’s less than 100 users,” says Holden.
One looming challenge is that with no obvious user base, dapp developers have to sell tokens early on, which are used to gain access to a service and carry out actions on it.
On Peepeth for instance, you need to have a certain amount of Ether to use the service and then pay nominal fractions of the token to do each peep. (Imagine paying a fraction of a cent, for instance, each time you posted a tweet on Twitter.) You also need to use a plugin like Metamask, Toshi or Cipher to access dapps from your browser.
Peepeth has the same layout as Twitter, and instead of a flying bird has a penguin as its logo. There’s a newsfeed of peeps from other users, mostly talking about bitcoin and decentralized services and tokens. There’s also an option to save up to 15 peeps before spending the necessary tokens to save them to the underlying blockchain network.
Among the other challenges for dapps is figuring out how to scale blockchain technology so that millions of people can potentially use it. For now, the underlying networks can only carry out a limited number of transactions per second.
Startups like Radix in the U.K. are working on solutions using strategies like sharding, but therein lies another challenge, according to observers. Attempts to scale blockchain technology may ultimately compromise its founding principles of decentralization.
Followers of blockchain worry that in the same way the internet promised a collaborative, decentralized and democratized place for doing business and sharing information, it was eventually hijacked by large third parties like Google, Facebook and Amazon, who now dominate the landscape.
To get more people using dapps, that might be the price developers behind the blockchain infrastructure have to pay.