Key takeaways
Last weekend, Binance registrations reached 200 million, an explosive growth in our user base that reflects the accelerating rate of adoption of digital assets and blockchain.
This process is in many ways very similar to past cycles of technological disruption, from which we can learn as we continue our journey towards the billion mark.
Blockchain and Web3 already present many more concrete use cases and utilities than any of the paradigm-changing technologies of the past in the early stages of their development.
Just as in previous cycles, incumbent players are faced with a strategic choice: adopt innovation or risk obsolescence?
The number of registrations on Binance has reached a staggering 200 million, a great achievement for our community but also a momentous event for the entire blockchain industry and a milestone in the history of innovation.
Throughout human history, technological innovation has continued to disrupt established industries and reshape economies. Time and time again, this process has pitted the incumbents, the established entities, against the disruptors, the innovative newcomers. The former are generally indifferent to new technology at first before gradually adopting it, forcing long-standing hegemons to adapt or face obsolescence.
Today, the rise of blockchain technology and the transition of the dominant Internet paradigm from Web2 to Web3 constitutes the most recent wave of disruption. History does not repeat itself, but almost: parallels emerge and lessons can be learned from comparing the current cycle of blockchain-based innovation with historical cycles. As we celebrate our 200 million user mark, where are we in the current iteration and where does Binance fit into it?
Accelerating cycles of technological disruption
The pace of technological innovation has accelerated after each cycle. The first sparks of the industrial revolution, which began in the 1760s with the steam engine, took several decades to transform industries in concrete ways. It was not until the early 1900s that the groundbreaking experiments and inventions in electrical research and electrical engineering during the first decades of the 19th century resulted in widespread electrification.
Decades later, the Internet revolutionized the world much more quickly, but since ARPANET in the 1960s and 1970s, it remained known to academics and amateurs only until the emergence of the World Wide Web (for short, the Web1) in early 1990, which catalyzed mass adoption globally thanks to the layer of utility and accessibility it added to the existing Internet infrastructure. After that, it only took a few years for technology to radically transform communication, commerce and entertainment.
Today, blockchain and Web3 are advancing at an unprecedented pace. Born in 2009, Bitcoin laid the foundation for a new asset class that has captured mainstream attention worldwide in less than a decade: the time lag between technology emergence and deployment The development of large-scale, publicly accessible applications based on it has been remarkably short. Millions of people across the globe are already using digital assets to efficiently transfer value online, engage in decentralized finance (DeFi) activities, and take advantage of various smart contract-based features, ranging from digital art to decentralized autonomous applications.
Some are not yet convinced and argue that the concrete usefulness takes a long time to appear. However, one only needs to study history to see that blockchain and digital assets have accomplished far more in terms of real-world use cases and value generation (and in remarkably shorter time frames). short) consumer-friendly than all the technologies that have changed the paradigms of the past. However, both are still in their infancy, and their enormous potential benefits as well as their increasingly steep adoption curve suggest that their future widespread use is beyond doubt.
Diffusion of innovation on the blockchain
In my opinion, the growth in Binance user numbers is enough to demonstrate the exponential nature of digital asset adoption.
Launched in July 2017, it took Binance six months to secure its status as the world's largest crypto platform by trading volume; Yet it wasn’t until May 2021 (nearly four years later) that we hit the 50 million user milestone. Going from 50 million to 150 million took us much less time: this threshold was reached in June 2023, in just 26 months. It then took us less than a year to pass the 200 million registration mark.
Every time I look at this curve, I think of Everett Roger's classic theory of diffusion of innovation, which states that diffusion is the process by which an innovation is communicated over time among participants in a social system. in several sequential stages: knowledge, persuasion, decision, implementation and confirmation.
People move from one stage to the next at different rates, which causes varying adoption times. Everett Rogers categorizes adopters into five groups based on their willingness to adopt new technologies: innovators (about 2.5%), first-time adopters (13.5%), early majority (34%), late majority (34%) and latecomers (16%). Innovators are early adopters of new technologies and are willing to take risks. They are followed by first-time adopters, often opinion leaders who promote even wider adoption.
Even if all cryptocurrency users were registered on Binance (which is clearly not the case), 200 million people already represent just over 2.5% of the world's population. In reality, we are much more than that: the innovators are already here, and the early adopters are joining the movement in droves, spreading the word as we move toward the early majority whose advent, as some theorists have concluded, marks the beginning of widespread or autonomous adoption. With such a steep curve, we might get there sooner than we think.
Appropriation ou obsolescence
Historically, incumbents have often rejected new technologies and the disruptors who introduced them before recognizing their utility and value. When Alexander Graham Bell invented the telephone in 1876, telegraph companies found the novelty strange and took little interest in it; However, the telephone's ability to enable instant voice communications quickly demonstrated its value and led to widespread adoption. Similarly, personal computers were initially viewed largely as toys for hobbyists, and there was widespread skepticism surrounding the usefulness of the personal computer. However, the rise of productivity software and the Internet has transformed PCs into essential tools for professional and personal use.
In our time, blockchain technology was met with initial skepticism from traditional financial institutions; however, its unique value proposition (disintermediation, transparency and security) has driven its growing adoption by both individuals and businesses.
When a new technology proves itself, incumbents face a crucial decision: adapt or become obsolete? The replacement of horse-drawn carriages by automobiles in the early 20th century forced horse-drawn carriage manufacturers and drivers to adapt or go out of business. Similarly, Kodak failed to keep up with the rise of digital photography and eventually lost its place in the industry, while companies like Canon and Nikon thrived by adopting the new technology.
Although the detractors are still very much present, many incumbents today have chosen to proactively adapt to the wave of upheaval induced by blockchain rather than ignoring or fighting it. Financial giants such as BlackRock and Fidelity, which are spearheading the recent Bitcoin Spot ETF rush, are the perfect examples, and many other big players in their respective fields, from JP Morgan to IBM, are exploring the blockchain technology and integrate it into their operations to improve efficiency and security. Businesses unable to adapt will certainly face obsolescence as decentralized systems gain traction. The current blockchain revolution reflects the innovation cycles of yesteryear, where incumbents embrace new technologies so as not to be left behind.
As blockchain and Web3 technologies continue to evolve, incumbents must recognize their disruptive potential and act quickly to integrate these innovations into their businesses. The future is likely to be a mix of appropriation and competition as blockchain reshapes the financial industry and many others, and the pace of growth of the Binance community is anything to go by. , this future is extremely close.
