While some big names like Starbucks and Nike were quick to adopt blockchain technology to promote and work with their brands, it seems that it will still take a bit of work and time until we see the broader enterprise space embrace the tech.
“I haven’t seen any killer use case yet,” Gary Liu, co-founder and CEO of user data solution provider Terminal 3, said during a fireside chat at Korea Blockchain Week. “I think we’re really, really early in enterprise adoption.”
“If the definition of ‘killer’ is a billion users, then I totally agree,” added Yue Hong Zhang, managing director and partner of Boston Consulting Group, where he oversees web3 and digital assets. “I don’t think enterprise blockchain has seen a ChatGPT moment. Everyone talked about AI for so many years, but it became really popular with ChatGPT.”
“ChatGPT is a great example,” Liu said. “AI went through four, five or six phases before that moment. . . . It’s a great example of the patience necessary before [an event of that scale happens] in the blockchain consumer enterprise world.”
But how can blockchain businesses show traditional corporations and brands that they should invest in the technology? According to Liu, you have to convince them that corporate advantages come before consumer scale. “Marketing and targeting becomes significantly faster,” he said.
An example of this is Cathay Pacific Group, which has been using blockchain technology since 2018 for mileage marketing campaigns. The airline giant also launched a blockchain rewards program for its customers in 2021.
The airline is targeting and using customer information through blockchain technology to run marketing campaigns, Liu said. This means the settlement of mileage points is significantly faster and less manual than other marketing campaigns, which leads to cost savings, he added.
We’re past the CMO, NFT-craze era, when many brands and companies launched campaigns related to digital art for their consumers, Liu said. Now companies have to focus on cost savings first; revenue opportunities come later.
In order to reach that point, there needs to be enough corporate and enterprise education around the blockchain before they can understand that “adopting this technology is a hedge for the future,” Liu said. “We haven’t had that inflection point where enterprise executives are informed. Some aren’t even willing to be informed yet. But I don’t know when that inflection point comes.”
First movers are often worse off compared to those that follow them when it comes to enterprise adoption in new technologies because the former are more likely to make mistakes and deal with poor infrastructure. But those who follow those initial adopters closely often take from the pot and get the better outcomes.
But when it comes to blockchain technology, Liu thinks it’s the other way around. “First movers are going to have a significantly greater advantage [because] they can set the standards. The playbook is not written at all.”
Also, given the nature of decentralized technology, the more decentralized an application is, the more powerful it becomes. “The longer in the game [they are], the more likely they’ll be decentralized in many wallets, especially with [crypto] whales who have moving power in technology. You’ll beat the fast followers,” Liu said.
Lastly, credibility is a huge factor in building trust and success in the crypto space. Sure, it doesn’t make a business bulletproof, but the longer a company has been around, the more likely people are willing to trust it. So, if a big brand or business has been in blockchain technology for a while, people are more likely to find it credible. “For enterprises, first movers matter in blockchain technology — CTOs should act fast rather than wait and see.”
Zhang feels it’s like building a muscle. “If you build it before the big battle, you’ll be fit for combat.” And even if you don’t have a “combat” moment, it’s still nice to have when things go awry, he added.
All that said, Liu still feels that if enterprise blockchain were to have a “ChatGPT moment,” it might come from a heavily centralized entity “that opens the door to digital assets first before we get to decentralized assets.”
The industry should pay close attention to what PayPal is doing today after it launched its own stablecoin, he added. “Being able to turn that many wallets into basically digital asset wallets, and having the rails that people already trust to onboard them to the decentralized world will give us so many more advantages than people are willing to admit today.”
It has to be something the space hasn’t seen before, Zhang said. “The use case needs to be nonexistent today. This is how you bring in a new wave of users.”
But blockchain technology and adoption has been around — and growing — for a number of years, so finding that “true white space” might be hard, Liu said.