Jackson Palmer, a product developer at Adobe and the creator of Dogecoin, has said that developers in the crypto community will now have to find a way to encourage users of centralized systems to convert to decentralized applications (dApps).

Decentralized systems and applications are significantly less efficient in processing information than centralized platforms. As such, incentivizing users of centralized platforms to switch to dApps could be even more difficult than developing decentralized alternatives.

“The ‘build it and they will come’ attitude simply doesn’t apply to ‘blockchain for X’ because it assumes that the bulk of users are currently so dissatisfied with the centralized version that they’d absorb typically large switching costs,” Palmer said.

Examples of Successful Alternatives

On Google Play Store and Apple App Store, mobile applications that compensate users based on their activity are becoming increasingly more popular. Some apps reward users based on the intensity of their workout while others directly compensate users for watching ads and microtasks.

These applications have succeeded in finding a native user base for their tokens because users have a reason to use decentralized alternatives. But, for the majority of applications in the blockchain sector, the same cannot be said and most projects have a “build it and they will come” attitude, as Palmer noted.

As an example, decentralized cryptocurrency exchanges have been highly anticipated since 2017 to the point to which Binance, the world’s largest digital asset trading platform, has publicly disclosed its intent to develop a decentralized exchange.

Yet, according to Dapp Radar, IDEX, ForkDelta, and Bancor, three of the most popular decentralized crypto exchanges on the Ethereum protocol, have less than 4,000 active daily users and a daily volume that does not even compare with a top 100 centralized crypto exchange.

Ethereum Dapp
Source: Dapp Radar

Major cryptocurrencies like Bitcoin and Ethereum have seen significant growth in daily volume and user base because the they operate as stores of value. The “killer” application of Bitcoin is its ability to retain value without being affected by the broader financial market.

“Meanwhile, stand-alone ‘base’ currencies such as Bitcoin and Ethereum are increasingly being perceived by the masses as investment vehicles rather than actual currencies due to retail investor apps such as Robinhood etc… so BTC or ETH is ‘just another stock’ to a lot of people,” Palmer added.

What Can Developers do?

Already, the open-source developer community of Ethereum are seeing progress in protocol-based scaling solutions like Sharding and Plasma that are expected to scale the Ethereum blockchain network rapidly.

In regards to front-end and UI, dApps still need to improve massively in order to streamline the process of shifting from centralized platforms to decentralized alternatives.

Even then, dApp operators will need to find ways to incentivize users to switch to dApps, like how Brave Browser has done so by directly compensating users with BAT, its native token.

In July, the Brave team announced that it has surpassed 3 million monthly active users, achieving the highest number of active users out of all dApps.

Featured Image from Kevin Rose/YouTube

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